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For immediate release: Monday, 22nd May, 2006
THOMAS CHARLES RESEARCH
REVEALS EXTENT OF DEBT REPAYMENT PROBLEMS AND HIGH
LIKELIHOOD OF PERSONAL INSOLVENCY IN GB
- 1.7 million have debt repayment problems
and one million face likely insolvency
- 1.7 million adults have problems repaying their debts
- Over one million adults are ‘quite likely’, ‘very
likely’ or ‘ certain’ to declare themselves bankrupt or
take out an IVA
- Divorced, female, 25-34 year olds and those living in
Scotland at highest risk
- 900,000 have contacted a debt solutions company
(London, 22/5/06) Thomas Charles (www.thomascharles.com),
the leading debt solutions consultancy, today released
the results of research which revealed the growing
problems with unsecured debt in Great Britain. The
research, conducted by YouGov in April, established that
19% of the adult population, around 8 million, has
unsecured debts of £10,000 and over. The research
focussed in depth on a sample of 1366 adults from this
group with high levels of unsecured debt and revealed a
worrying picture of debt repayment problems and likely
personal insolvency.
21% of people with unsecured debts of £10,000 or over,
1.7 million adults, have problems repaying their debts
‘every month’, ‘most months’, or ‘quite frequently’. 9%
of them, three-quarters of a million, face the problem
every month. The situation is worse for separated and
divorced people, 33% of whom have debt repayment
problems 21% for all adults in Great Britain. Females
(26%), 25-34 year olds (23%), those with low income, up
to £20,000 pa (44%), and those living the South (24%)
and Scotland (23%) are also above average in terms of
having debt repayment problems.
An even more worrying aspect of the research is the
number of people who might face personal insolvency. 13%
of those interviewed said they were ‘quite likely’,
‘very likely’ or ‘certain’ to declare themselves
bankrupt or take out an IVA (Individual Voluntary
Arrangement). This equates to over one million adults
across Great Britain. The latest figures from the DTI
show that there were 78,000 personal insolvencies in
England and Wales in the last year and recent forecasts
have predicted this figure will soon reach 100,000. Even
allowing for the fact that the DTI figures do not
include Scotland (about 9% of the UK), the latest Thomas
Charles research suggests that the figure could be
several times that in the next few years. Another key
stat supporting this concern is that 11% of respondents
have already sought help from a debt solutions company,
equivalent to 900,000 nationally.
Those groups at particular risk of personal insolvency,
with figures above the 13% national level are:
- divorced, 18%
- 25-34 year olds, 16%
- female, 15%
- those living in Scotland, 20%
- low income categories (below £20k pa), 27%
- those living in rented or council property, 28%
James Falla, Director of Thomas Charles, commented:
“The Governor of the Bank of England is right to
be concerned about the number of families who are
struggling with high levels of unsecured debts. This
research further illustrates the scale of the problem.
Our research shows an enormous uptake of unsecured debt
across all areas: credit cards, personal loans, student
loans, hire purchase and overdrafts. This puts literally
millions on the borderline.
The rise of the ‘credit junkie’ phenomenon and the
“spend, spend, spend” culture is a long term issue. It
needs addressing at grass roots level and that means via
the educational system. There has been a strong movement
from the educational community to add debt education to
the curriculum and I recently appeared on Teachers’ TV
supporting such an initiative.”
Asked what was the one overriding reason for having such
high levels of unsecured debt, respondents answered:
overspending (23%), poor cash flow (21%), student debt
legacy (13%). Unemployment/redundancy, illness,
divorce/separation, leaving work to have a child and
loss of overtime also featured.
Of those who had already sought help from a debt
solutions company (11%), 41% found such a company on the
internet, 33% in the media, and 13% from a friend. Asked
how they rated the service of the company they used, 54%
said fairly or very good but a quarter (25%) said fairly
or very poor.
Consumers wishing to contact Thomas Charles for advice
on debt can do so via the company’s website (see above)
or by phone on 0800 072 5988.
- Ends -
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About Thomas Charles & Co Ltd
Thomas Charles & Co Ltd was founded in August 2004 by James Falla and operates in the South East of England, with an office in Slough. It has a personal, consultative approach to debt management and has face to face meetings with all its clients.
Its debt management solutions include Informal Debt Repayment Programme, Individual Voluntary Arrangement and Bankruptcy. It works with third party Insolvency Practitioners in London and Cardiff.
For further information, please contact:
Stewart Ross (Ross Media Relations)
Tel: 07966 540787
stewart@thomascharles.com
James Falla (Director of Thomas Charles )
Tel: 01753 570442
james.falla@thomascharles.com |
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