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Creditfix LB 03-2017

Consumers Unable to Cope with Personal Debt

British consumers are beginning to show worrying signs of being unable to cope with unsecured personal debt.

New figures released in a consumer debt report from data provider and debt solutions firm TDX found unsecured personal debt outweighs the average monthly earnings of British consumers.

28 per cent of consumers detailed in the report fear that they may not be able to keep up with repayments on their personal debt.

A quarter of those surveyed owe more than ?2,000 whilst average weekly earnings in the UK, according to the Office for National Statistics, stands at ?502.

Over 40 per cent of the 2,100 consumers that responded to the survey confirmed that they were planning to either change jobs or take on an extra job, in order to cope with their debts.

This is thought to make it harder than ever for creditors to gain a comprehensive view of their customers? financial circumstances to responsibly recover money owed.

The survey also found that less than 10 per cent of consumers would choose to seek help from the company or lender they owe money to if they needed financial help.

TDX feel that lenders need to be supportive and offer practical solutions to any financial difficulties they encounter, such as a reduction in repayment costs, a reduction or break in interest being added to their debt or a part write-off of their debt.

Head of financial difficulties at TDX Group, Richard Haymes, said: ‘Our research shows that creditors need to act now to plan for a spike in problem debt.?

He continued:? ‘We?re seeing a change in the mix of creditors who are owed money, reflecting a growth in non-traditional credit default. Over time, this will change the payment hierarchy, and with the profile and payment decisions of those who owe money changing, the need to understand the customer is more critical than ever.’

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