One month to clear credit card and loan debt

If you racked up some bills over Christmas, then you may have worked all through January for nothing. That’s because recent research from Unbiased.co.uk suggests that Brits have worked for 31 days in order to earn enough money to pay the interest on our credit card and loan debt. The average figure for interest on credit card and loan debt is £2,012. Based on the average UK salary of £23,556, Unbiased.co.uk suggests that it would take 31 days (all of January) to earn enough to pay this amount. That does not include any money that would be needed for actual debt repayment.
 
According to the organisation, the nation is still reluctant to put a brake on their spending and take control of their finances. Although personal debt levels have fallen by 7 per cent in the last three years, and average interest payable has fallen by 59 per cent in the same period, the proportion of income still needed to service the average debt is still high, with people having large amounts of debt to their name. Recent research from the same organisation shows that Brits are still relying on borrowed money, borrowing 49 pence for every pound saved.

David Elms, Chief Executive of Unbiased.co.uk suggests that people need to control their spending behaviour and save more, adding: ‘Why spend an entire month slaving away to earn just enough money to service the interest on this financial burden? Surely people would rather see this money work hard for them in return, and deliver them a healthy savings pot or a nest egg to enjoy in the future. An independent financial adviser (IFA) can help you sit down and assess your financial situation and help you identify where your monthly budgeting could be improved and help you embark on the path to saving.’