Debts are becoming more difficult to handle, as the number of people who spend over half of their income to their unsecured debt payments has tripled in the past 12 months.
Callcredit, a credit reference agency, have released figures which show that more than 6% of the population are losing more than half of their monthly income to debt repayments which suggests that more debt advice is needed. The same goes for those who are spending approximately 30% of their income to their debts, this figure has doubled to 14%.
Anyone who spends more than a quarter of their salary to their unsecured debt is classed as being over-indebted, according to guidelines published by the Department of Business, Enterprise and Regulatory Reform.
Owen Roberts, head of Callcredit Check, said: “The increasing proportional spend on unsecured debt paints a concerning picture of consumer finances within the UK and this level of debt servicing would appear to be unsustainable.”
Worries about a recessions and the hindering damage of the credit crunch has left more people to worry about their financial future, as 43% believe that their financial situation is going to get worse over the next year.