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Under strict embargo until: Thursday, 3rd August, 2006
LATEST RESEARCH SHOWS NUMBER OF CONSUMERS LIKELY TO GO BUST IS GROWING FAST
- 1.1 million could face personal insolvency -
(London, 3/8/06) According to research published today by Thomas Charles (www.thomascharles.com), the leading debt solutions consultancy, the number of consumers facing personal insolvency is growing fast. Of adults with a high level of unsecured debt (£10,000 or over), 20% of those interviewed said they were ‘quite likely’, ‘very likely’ or ‘certain’ to declare themselves bankrupt or take out an IVA (Individual Voluntary Arrangement), compared to just 13% when the company ran the same survey in March, just four months ago. This equates to 1.1 million adults across Great Britain. These results presage further considerable growth in the personal insolvencies to be announced in the latest DTI stats due out on Friday this week. Currently the DTI shows insolvencies running at 56% year on year growth, with IVAs more than doubling in the last year (+111%).
The research, conducted by YouGov via an Omnibus last week, also showed an increase in the number of adults having problems repaying their debts ‘every month’, ‘most months’, or ‘quite frequently’, from 21% in March 2006 to 23% this month, the ‘every month’ category growing from 9% to 11% in the past four months.
James Falla, Director of Thomas Charles, commented:
“The DTI stats record personal insolvencies on a quarterly basis. Our latest research shows that the problem is here to stay and is set to continue to grow. Thomas Charles’s latest estimate for the DTI stats on personal insolvencies for the whole of 2006 is over 100,000 (compared to 67,584 in 2005). However even this figure pales in comparison to the million plus adults that our research identifies are currently in some danger of insolvency over the next years.
With 8 million adults having unsecured debts of £10,000 and over, our research shows an enormous uptake of unsecured borrowing across all areas: credit cards, personal loans, student loans, hire purchase and overdrafts. This puts literally millions on the borderline. If interest rates rise by a quarter-point to 4.75% in the next three months, as many economists are predicting, if unemployment goes up, or if individuals suffer an illness or loss of income, their debts can quickly spiral out of control.”
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.
CONSUMER DEBT:
Key stats
- 8M or 1 in 5 adults have unsecured debts of over £10k
- 4M adults have unsecured debts of over £20k
- 4M adults owe more than £5k on their credit cards
- 2M adults have secured debts of over £100,000
- 1.7 million adults have debt repayment problems
- Over 1 million adults are ‘quite likely’, ‘likely’ or ‘certain’ to declare themselves bankrupt or take out an IVA
- 73% rise in personal insolvencies over past year
- £1 trillion of debt
Top tips
- Don’t bury your head in the sand. Work out your financial position (try debt-help-uk.org.uk debt wizard).
- Consider transferring credit card debt to a 0% card while you deal with more pressing bills, such as any council tax or mortgage payments. But don’t use this as an excuse to run up more debt elsewhere.
- Don’t take out other loans to pay off the original debt or use a consolidation loan. If you must do this, be disciplined and don’t use the new loan money for anything else.
- Talk to your creditors about structuring a realistic repayment plan; the CCCS can help (0800 138 1111).
- If you cannot do a repayment plan and you do not want to go bankrupt then try an IVA, (see iva.co.uk for more info on IVAs). The IVA helpline can help (0800 197 48 38).
- If you want to consider bankruptcy then try the CAB (citizensadvice.org.uk)
Useful contacts:
- Ends -
Notes to Editor:
The research was conducted by YouGov via two Omnibus surveys, both with over 2000 respondents designed to represent all GB Adults. The first Omnibus was followed by an in-depth survey on 1450 adults with unsecured debts of £10,000 and over. The research was conducted online and fieldwork took place from 29th March, 2006 to 3rd April, 2006 and from 25th July, 2006 to 27th July, 2006.
Please find below some key tables from the research.
How likely is it that you will become insolvent i.e. declare yourself bankrupt or take out an IVA (Independent Voluntary Agreement)?
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Mar % |
Jul % |
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Not at all likely |
0.86 |
0.80 |
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Quite likely |
0.08 |
0.12 |
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Very likely |
0.03 |
0.05 |
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Certain |
0.02 |
0.03 |
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Some likelihood |
13% |
20% |
Do you ever have problems repaying your debts?
| |
|
Mar % |
Jul % |
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Yes, every month |
9% |
11% |
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Yes, most months |
5% |
3% |
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Yes, quite frequently |
7% |
9% |
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Yes but only occasionally |
28% |
26% |
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No, never |
49% |
49% |
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Prefer not to say |
2% |
3% |
Further charts, tables and analyses are available on request.
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About Thomas Charles & Co Ltd
Thomas Charles & Co Ltd was set up in 2004. The Joint Managing Director, James Falla has 7 years experience in the insolvency and debt management industry and was involved in the set up of debt help specialists, Brookvale Group PLC, listed on OFEX since 2001.
Thomas Charles operates throughout England and Wales with its head office in Acton (West London). It has a personal, consultative approach to debt management. It focuses primarily on providing formal solutions for debt problems including Individual Voluntary Arrangement and Bankruptcy. However, it will also provide advice around informal debt repayment plans where appropriate. It works with third party Insolvency Practitioners around the UK.
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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