Debt Advice Help and Support

Stress and Anxiety Worsens as Personal Debt Increases

Written by on 11 December, 2009

The most common reasons for experiencing financial difficulties are job losses, illness, over-commitment, irresponsible lending, poor financial skills and a rise in living costs, a report by Credit Action has stated.

Additional information released by Shelter and Money Advice Trust recently demonstrates that 1.3 million low income families in the United Kingdom are unable or struggling to keep-up with their debt and financial obligations. The most concerning part is that as many as 39% of these families believe that their dire personal finances have led to considerable personal stress and anxiety. For those families struggling with debt problems that also have young children, this figures increases to an alarming 50%.

Despite the fact the UK has the top net household income in Europe, factors such as the high cost of living, longer working hours and a lower holiday entitlement, has lead Britain decreasing in the uSwitch.com Quality of Life Index recently. Clearly, the situation is even worse for those who have fallen behind with their personal debt commitments.

A body of research by Bright Grey revealed that the average UK citizen is just £155 from a complete financial collapse. A total of 39% of those surveyed found that 39% of people would experience considerable difficulty meeting their financial obligations if their monthly bills increased by just £50. Essential bills, such as paying utility bills and food, now account for an average of 68% of total household income. This is the equivalent of £1,378 for individuals and £2,001 for each family unit.

It isn’t just unsecured personal debt that is currently causing financial hardship in the United Kingdom. Essential services, such as gas and electricity bills, are also a source of great stress and anxiety. The Bureau (CAB) has stated there has been a 46% rise in the number of consumers who are finding it hard to pay utility companies for their gas and electricity consumption.

The stress and anxiety that financial pressure puts on relationships is also a grave concern, as many people try to hide their debt problems from loved ones. AXA recently stated that 24% of UK adults (or 12.4 million people) are hiding at least one debt from their friends and family. They believe that the average amount of hidden personal debt is £4,096 – the cumulative national equivalent of £50.1 billion. The stress and anxiety this has created has led to 5% of those surveyed missing work, which has led to a lower disposable income at month end.

All of these problems have culminated in the 35,242 personal insolvencies reported by the Insolvency Service over the course of the third quarter of 2009. As well as representing an increase of 28.2% compared to just 12 months earlier, this is the highest set of figures ever recorded.

Whilst facing up to debt problems is difficult, seeking debt advice may help reduce financial based stress and anxiety. Guidance and assistance on debt solutions are available for those with financial difficulties throughout the UK. Debt solutions such as consolidation loans, debt management plans, or an Individual Voluntary Arrangement (IVA) may be able to assist in getting personal finances back under control.

Useful links: Debt Consolidation

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