83 Days of salary is needed just to clear the interest on the UK'S debt mountain
- Wednesday the 25 March is Debt Freedom Day 2009
- Servicing just the interest on the UK’s debt mountain will eat up almost all of our combined January, February and March earnings
- Personal loan debt has risen by over 1.6 billion compared to last year
- Lower interest rates help Brits service their debts but more needs to be done
New figures* from Unbiased.co.uk, the professional advise website, show that as a nation, we have worked the first 83 days of this year just to earn enough money to service the interest on our debts. This means that so far the nation has not even started re-paying the actual debt itself and thus Wednesday, the 25th March is this year’s Debt Freedom Day.
Unbiased.co.uk’sfigures show that personal loan levels in the UK increased to 11.4 billion in 2008, up by over 1.6 billion compared to the previous year and mortgage debt from equity release loans also increased by 6.5 billion. However, credit card debt decreased by just over 4.9 billion in 2008.
The UK has seen a dramatic fall in interest rates and this should help people service their debt with average interest rates on personal loans now 3.25% lower than they were last year. Debt Freedom Day highlights once again just how much debt we are currently servicing and more importantly how much of our income is being paid out just to pay the interest on our debts, let alone the actual debt itself.
David Elms, Chief Executive of Unbiased.co.uk said: “It takes a date like Debt Freedom Day to bring home just how long we are spending as a nation on debt and it will hopefully spur people into action to do something about their debts.
“Tackling your debt can be a daunting task, but you don’t have to do it on your own. With interest rates at a record low now is the time to seek independent financial advice to ensure your money is working as hard as it can and any debt is being repaid as quickly as possible. Seeking independent financial advice is the first step to take control of your debt management – an IFA will take a look at all of your finances to work out the best way for you to pay off your debts.”
To help consumers take control of their spending habits, reduce their debt burden and convert some of their outgoings to savings for the future, Unbiased.co.uk offers an online guide full of information on how to budget better and reduce your financial burden. Consumers can also benefit from using the online budget calculator, as well as listening to our savings vodcast.
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* According to independent analysis of the most recent official figures conducted by independent agency, RAKM, on behalf of IFA Promotion. Data sources are Bank of England, British Bankers Association (unsecured borrowing + equity release, no mortgages), ABI, AIC and IMA. With detailed queries on this analysis call Paul Hersey on 01737 342863.
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For further information on Unbiased.co.uk, the professional advice website please contact:
David Elms / Richard Winder | Anna Schirmer/Jennifer Comerford/ Anna Moulds |
Unbiased.co.uk | Lansons Communications |
020 7833 3131 | 020 7294 3682 |
For expert comment or case studies from over 200 media-friendly IFAs, journalists should visit www.unbiased.co.uk/bluebook to search online or call Unbiased.co.uk’s Media Services hotline on 020 7294 3682.
PLEASE NOTE: We have now discontinued the consumer hotline and so consumers seeking an IFA should visit www.unbiased.co.uk
Notes to Editors
Unbiased.co.uk, the professional advice website
Unbiased.co.uk is the free and confidential UK-wide search service matching consumers with the most appropriate local professional advisers for their needs. In 2008, Unbiased.co.uk fulfilled over half a million searches for local, professional advice.
The portal currently houses three professional advice searches: ‘Find an independent financial adviser’, ‘Find a mortgage adviser’, and (soon to launch) ‘Find a solicitor’. These searches enable consumers to find relevant professional advisers by postcode, area of specialism, qualification and payment method.
IFA Promotion, the organisation behind Unbiased.co.uk, is now in its 20th year, and was originally set up to promote the benefits of independent financial advice to the consumer.
Unbiased.co.uk’s product provider sponsors
AEGON Scottish Equitable Plc | Lincoln |
Alliance Trust | Lockton |
AXA Life | Lutine Assurance Services |
Bright Grey | MetLife |
BPP | National Savings & Investments |
Canada Life Ltd | New Star Investment Funds |
Cardif Pinnacle | Norwich Union Life |
The Children’s Mutual | Prudential |
Clerical Medical Investment | Royal London 360 |
Defaqto | Scottish Life |
Friends Provident | Scottish Widows Plc |
The Hartford | Standard Life Assurance Company |
Invesco Perpetual | Unum |
Legal & General | Zurich Intermediary Group |
Registered Office: Unbiased.co.uk is the consumer brand of IFA Promotion Ltd, 90 St. Vincent Street, Glasgow G2 5UB. Registered in Scotland: No. 114606