Half of UK adults struggle with debt
Half (52%) of the UK adult population is struggling to keep up with debt, according to the Money Advice Service (MAS).
The percentage of people finding it hard to pay their bills and repay loans credit has risen 17 percentage points from 35% in 2006.
Figures from switching website uSwitch.com also suggest that more than one in four Brits are forced to borrow money to cover essential living costs, which have risen by 25% over the past five years.
Car insurance has increased by 67%, gas 52%, electricity 32% and petrol 33%.
However, wages have only crawled upwards by 6% over the same period and in real terms have fallen back to 2003 levels.
While 49% of MAS survey respondents admitted to being concerned about their finances, the organisation said that people are becoming more diligent about their money matters and suspicious of financial scams.
Just over two-thirds (67%) said they were 'very organised when it comes to managing money' and 54% said they regularly check all income and outgoings on their bank statements to keep track of their expenditure.
A further 40% said they look for suspicious transactions on their accounts, too, and on a more positive note, 85% of adults said they were saving.
But some 8 million people weren't so familiar with their finances –16% were unable to identify the correct balance on a bank statement.
Meanwhile, the Insolvency Service said today that personal insolvencies increased in the second quarter of 2013 to 25,717, up 2.8% on the previous three-month period but 6.1% down on the same period a year earlier.
However, Bev Budsworth, managing director of The Debt Advisor, said while the general downward trend is encouraging, "it is down primarily because the cost of making yourself bankrupt of £750 deters many from taking this step".
Generally speaking, insolvency is to businesses what bankruptcy is to individuals. A company is insolvent if the value of its assets is less than the amount of its liabilities, or it is unable to pay its liabilities (loan payments) as they fall due. It’s an offence for an insolvent company to keep trading, so the main options available to an insolvent company are: voluntary liquidation, compulsory liquidation, administration or a company voluntary arrangement.