More than 900000 Brits struggle with debt alone

More than 900,000 people in the UK who are struggling with debt are doing so without any help or advice, according to insolvency trade body R3.

Research by the organisation has found that despite a sharp rise in the number of insolvency cases over the past decade and continued debt problems among UK families, a number of barriers are stopping people from taking even the simplest of steps towards ridding themselves of financial difficulty.

When asked why they had yet to talk to anyone about their financial situation, 44% of people struggling with debt said they didn’t feel they problem was big enough to need help. This was followed with 25% of respondents believing their financial situation was only a short-term problem.

Meanwhile, more than one five (21%) said they thought it was easier not to think about the situation and the same number said they simply didn’t know where to go for help. Another common barrier was people thinking they couldn’t afford help or advice, with 44% believing it came with a price tag.

People who are faced with debt problems need not do it alone and 62% of those struggling are taking an excellent first step by airing their concerns with family or a trusted friend. This should then be followed by seeking advice from a financial expert. This can provide people with the answers to many questions about their finances as well as the best options available to them.

UK debt problems

Total UK personal debt stood at £1,460 billion at the end of May, with the average household debt now £8,716. As a result, 391 people are declared bankrupt or insolvent every day – which works out at one person every 51 seconds.

One of the simplest ways people can take action is by speaking or writing to creditors to explain their current financial situation. The study found that 19% of people choose not to open their bills because they’re unable to face them, while a staggering 77% try to avoid the companies they owe money to.

More than 500,000 people have taken the option of entering into a formal debt management plan, which can be a very sensible option for those in debt to get back on their feet. However, the study found that people weren’t always aware of the variety of options that are available. While 80% were aware of bankruptcy, only half knew about Individual Voluntary Arrangements (IVA) and just 41% had knowledge of Debt Management Plans.

The study, which was carried out by research agency ComRes on behalf of R3, surveyed 1,961 members of the public who described themselves as struggling with debt.

Source: moneyexpert.com