'Debt Denial' Continues across the UK

New statistics have revealed a startling amount of people in debt are failing to seek debt help for their problems. According to YouGov's quarterly 'DebtTracker' survey conducted in February 2009, only 37% of UK consumers who have fallen behind with their bills and credit commitments have sought debt counselling in the past six months.

More worryingly, 64% of those who had fallen behind felt that they did not need to seek any debt advice. These results are a surprising statistic about the nation's debtors, considering that a recent poll conducted by The Resolution Foundation found that almost 3 million people on low incomes 'worry all the time' about the state of their financial situation. The poll classified a low income family as having a household income of between £11,650 and £27,150. A total of 13.4 million adults fall into this category.

This same poll by the independent research and policy organisation also discovered that almost 90% of low income families worry 'sometimes' about the state of their finances.

In addition, a separate survey by PriceWaterhouseCoopers found that one in six UK consumers believed that they were unable to cover their credit commitments. This figure increased to almost one in three people when consumers were questioned about their ability to make debt repayments in the near future. Unlike the survey produced by the Resolution Foundation, all socio-economic groups were covered in the PriceWaterhouseCoopers research.

Given the relatively low percentage of consumers considering debt counselling, it is perhaps surprising to discover that another study by Which Magazine revealed that as many as 6 million people are fearful that their home will be repossessed. This same piece of research also discovered that 62% of the working population were worried that they were facing unemployment and would lose their job and a further 43% were concerned that they wouldn't be able to afford to pay their mortgage.

Figures produced by the Financial Services Authority (FSA) showed that there were as many as 46,750 house repossessions during 2008. The Council of Mortgage Lender (CML) believe that this number will increase to approximately 75,000 during 2009.

For consumers, a debt advice and a budgetary analysis can help discover the best way to tackle their debt problems and potentially avoid home repossession. An Individual Voluntary Arrangement (IVA) can reduce monthly payments and unlike bankruptcy, it allows a homeowner to keep their primary residence.

These new statistics revealing both a lack of UK consumers seeking debt advice an increase of people finding themselves in serious debt are worrying, considering a debt counselling service may have prevented many of these home repossessions.

Whether it be a case of debt denial with people 'burying their heads in the sand' or consumers simply not realising that financial advice is available, these statistics are concerning. Debt counselling can help a struggling consumer to get their finances back on-track before their financial woes become too serious.

Useful links: Debt Management