More than half of the UK adult population, nearly 27 million, will head into 2020 in debt, with almost five million owing over £10,000 in loans and credit, according to a poll conducted by a price comparison website.
Money.co.uk polled 2,018 people living in the UK, aged 16-64 years, and found that, not including mortgages, 63 per cent will go into the New Year with some form of personal debt – including money owed on credit cards, personal loans, car loans, bank overdrafts and payday loans.
Salman Haqqi, personal finance expert at money.co.uk, said: “It’s sobering to think that almost 27 million people will be heading into 2020 saddled with thousands of pounds of personal debt – a number that shows no sign of diminishing any time soon.
“It’s alarming to see that almost half of people never move their debt around to take advantage of better interest rates, something that could save them hundreds of pounds a year and help them pay off their debts sooner. Zero per cent balance transfer cards are a good way to manage debt as they remove the added pressure of interest from your monthly payments.
“One of the most concerning stats from the research is that 40 per cent of people are using debt to pay for household essentials, simply unable to afford the cost of living from their regular income.”
Almost half, 46 per cent, of respondents said that they have built up a personal debt over a number of years and believe that it will take on average three years to pay it off. While, 34 per cent said it had accrued over the past 12 months.
On average, people have been in debt for two years and a half years, but a fifth have owed the money for four years or more.
According to the poll, people allocate 22 per cent of their monthly wages, on average, to paying off debt. Two-thirds, 67 per cent, are trying to pay off their debt on their own.