Personal debt in the UK has hit the £1.4 trillion mark with consumers expected to borrow an additional £327 million today alone.
The latest figures from debt charity Credit Action show personal debt increased by £120 billion last year. Of the £1.4 trillion owed, over £1.1 trillion is secured on property while £224 billion is consumer credit such as loans and credit cards.
The average British adult owes £4,713 not including mortgages. And with that amount of debt, it’s no wonder that interest repayments have soared to a record £94.6 billion.
Credit Action calculates that debt in the UK is increasing by £1 million every five minutes.
Need help dealing with debt?
If you are worried about being in debt then the first step is to face up to your situation and start taking action to deal with it.
Credit Action recommends that you get in touch with every company you owe money to as soon as possible to explain your situation. If a creditor has written to you or sent a court summons then reply within the time period specified giving them all the facts about your situation.
Make sure you keep copies of all correspondence and keep up communications with creditors – they want to get their money back so it’s in their interests to help you repay the debt.
Once you have listed all your debts, it’s time to prioritise them. For example, a mortgage or secured loan is a major priority because if you fail to repay the money then you could lose your house. Utility bills are also important because if you fail to pay these you could lose access to electricity, water or gas.
If you are racking up more debt on a high interest credit card then consider switching to an interest free deal on balance transfers.
For more ways to get out of debt read our article Reduce your Debts.