70 Days of Salary Is Spent Just to Clear Interest on Credit Card and Loan Debt

New figures* from Unbiased.co.uk, the find an independent financial adviser search, show that as a nation, we have worked the last 70 days solid to earn enough money just to service the interest on our credit card and loan debt, let alone re-paying the actual debt itself and thus Monday 10th March is hailed as Debt Freedom Day.  This is a stark increase from last year, when Debt Freedom Day was the 1st February 2007, meaning we only spent 31 days to service our debts.

Unbiased.co.uk’sfigures show that personal loan levels in the UK increased to £9.8 billion, from £2.6 billion last year. At the same time average interest rates on personal loans are now 0.5% higher, which means that Brits pay almost £1.5 billion in interest payments alone. Credit card debt in contrast has dropped slightly, decreasing from £55.6 billion to £54.9 billion.

Personal debt levels in general have increased by over 10% over the last year and average levels of interest payable on this debt has increased by over 6%, Debt Freedom Day signifies just how much debt people still have to their name, and most importantly, the proportion of income needed to service this financial burden.

David Elms, Chief Executive of Unbiased.co.uk said: “This year’s Debt Freedom Day is a real warning for UK consumers – as it marks the day we start paying off the actual debt levels rather than merely servicing the interest accrued. Compared to last year we spend almost two months longer this year to pay off the interest of our borrowings and this doesn’t event take into account mortgage costs.

“While Debt Freedom Day is of course a hypothetical point in the financial calendar, people should pay attention to it. In the current economic client is has never been more important for people to realise just how much it costs to service their debts and to ensure they have adequate funds available to do so.

“Seeking independent financial advice can be the first step to taking control of your finances. An independent financial adviser (IFA) can assess your financial situation and help you identify where your monthly budgeting could be improved and help you embark on the path to saving.”

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 a series of handy tips to help rein in spending.  For online information and details of local IFAs who can help you make your money go further visit www.unbiased.co.uk/getsaving or alternatively call free on

0800 085 3250

-ends-

* 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, AITC and IMA.  With detailed queries on this analysis call Paul Hersey on 01737 342863.

For further information please contact:

David Elms

Anna Schirmer/Jonathon Grove

Chief Executive

Lansons Communications

Unbiased.co.uk

020 7294 3682

020 7833 3131

For expert comment or case studies from over 200 media-friendly IFAs, journalists should call Unbiased.co.uk’s Media Services hotline on

020 7294 3682 or search online at www.unbiased.co.uk/media

1.      Independent Financial Adviser Promotion

Unbiased.co.uk is the consumer brand of IFA Promotion, the organisation established in 1989 to promote the value and accessibility of independent financial advice to the public. It represents around 9,000 firms of independent financial advisers across the UK, incorporating over 17,000 registered individuals. These individuals hold over 22,000 incremental qualifications which are each individually verified by the awarding body. IFA Promotion welcomes the prominent display of incremental qualifications and further developments into the credentials of independent financial advice.  

IFA Promotion is sponsored by 28 leading financial institutions, and in the past 12 months, over 575,000 consumers and businesses used unbiased.co.uk to find local independent financial advice.

IFA Promotion believes Independent financial advice should be:

·         Affordable. The option to take independent financial advice should be available, by right, to all- not just the wealthiest in society.

·         Convenient. IFAs should be available in the location of the consumer’s choice, wherever they live in the UK.

·         Transparent. It must be clearly transparent to consumers who is able to offer independent financial advice and who is not.

2.      Independent Financial Adviser Promotion’s sponsors

Abbey for Intermediaries

Lincoln Financial Group

Aberdeen Asset Management

Lutine Assurance Services

AEGON Scottish Equitable Plc

National Savings & Investments

Alliance Trust

New Star Investment Funds

AXA Life

Norwich Union Life

Bright Grey

Prudential

Canada Life Ltd

Scottish Life

The Children’s Mutual

Scottish Life International

Clerical Medical Investment

Scottish Widows Plc

Defaqto

Skandia UK Group

Friends Provident

Standard Life Assurance Company

The Hartford

Tomorrow

Invesco Perpetual

Unum

Legal & General

Zurich Intermediary Group

Registered Office: IFA Promotion Ltd, 90 St. Vincent Street, Glasgow G2 5UB. Registered in Scotland: No. 114606

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