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Debt levels have risen by 48 per cent in the last year
Written by ey on 25 January, 2012Rising living costs, higher than expected unemployment, and an inability to save for the future has lead to debt levels soaring.
This is according to pensions and insurance provider Aviva, whose latest research shows that typical family debt grew by a whopping 48 per cent last year, rising from £5,360 in January last year to £7,944 this month.
At the same time average living costs rose by 62 per cent.
Furthermore, the average amount of money saved by a family each month is just £21, while 42 per cent do not save anything at all. This shows that people are increasingly using debt to get by rather than funds put away previously for a rainy day.
Looking at the next six months, 62 per cent of families said that they are concerned about the rising cost of living, 41 per cent are worried about the threat of redundancy and 41 per cent are worried about incurring unexpected costs.
Louise Colley, head of protection sales and marketing, Aviva said: "Although many families are trying to build a savings cushion, this report clearly demonstrates that they also need to consider a protection buffer – protecting themselves against those unexpected financial shocks, such as having a serious illness or worse still, a death.
"The impact of not having protection in place can be devastating at what is already a hugely difficult time. Around half of families say they are planning to get their finances in order in 2012, so for their peace of mind, we'd strongly urge them to put protection at the top of their list."
Aviva's findings back up those released by the Office for National Statistics (ONS) recently, who also stated that people out of work rose by 118,000 in the three months leading up to the end of November 2011.