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LIKELIHOOD OF INSOLVENCY INCREASES WITH AGE
- 1 in 4 indebted Britons struggling to meet repayments -
(London, 03/05/07) According to the latest quarterly research published today by leading debt consultancy, Thomas Charles (www.thomascharles.com), problems with debt increase with age.
According to research conducted in April 2007 in conjunction with YouGov, those in over £10k of unsecured debt reporting some likelihood of insolvency (‘quite likely’ – ‘certain’) rises steadily from just under 1 in 10 18-24 year olds (9%), to almost a fifth of 35-44 year olds (18%), right up to almost a quarter of 55+ year olds (24%).
The increase in financial commitments that comes with age is also reflected in the numbers experiencing regular repayment problems (‘quite frequently’ > ‘every month’). The proportion rises steadily from 14% of 18-24 year olds, to almost a quarter of 35-44 year olds (24%), up to almost a third of 55+ year olds (32%).
This means 55+ year olds are 167% more likely to go insolvent and 129% more likely to experience debt repayment problems than their 18-24 year old counterparts.
Looking at the figures overall, 1 in 4 (25%) indebted Britons are now struggling to meet repayments. Those in over £10k of unsecured debt reporting regular debt problems (‘Quite frequently’ > ‘Every month’) increased by 9% since the last quarter (from 23% to 25%), and by 19% (from 21% to 25%) year on year.
The proportion of people in over £10k of unsecured debt facing insolvency has also increased. Year on year, the number reporting some likelihood of insolvency (‘Quite likely’ > ‘Certain’) rose by 38% (from 13% to 18%).
James Falla, Director of Thomas Charles, commented:
“The age trend identified in this latest research is very much supported by what we see every day at Thomas Charles. As age increases, so too do expenses and financial commitments.
A young person’s life, for example, might typically take the following route: entering into a relationship, moving in together, taking on more rent or a mortgage, an expensive wedding, perhaps the car on HP, and eventually, the expense of children and the likely reduction of income that goes with it. Unfortunately, divorce is also a very expensive, but all too common, life event that can cause serious financial difficulty, particularly in older people.
It’s not surprising, that we are also seeing a general increase in the number of people struggling with debt and considering insolvency. Debt is still a serious issue in Britain and as long as people continue to take a ‘buy now, pay later’ approach to the expenses of life with little thought for saving for a rainy day, there will be an inevitable portion of the population that will run into financial difficulty.
Nevertheless, when the DTI’s latest insolvency stats are released on Friday 4th May, I would not expect to see the great leap in insolvencies that we saw during the same time last year. This is partly due to a tightening of criteria by creditors in their acceptance of IVAs, but also partly because we appear to be approaching a more level ‘run rate’, having cleared much of the historical backlog of people in serious difficulty that built up before insolvency became a well-known option.”
Consumers wishing to contact Thomas Charles for advice on debt can do so via the company’s website (www.thomascharles.com) or by phone on 0800 072 5988.
CONSUMER DEBT:
Key stats
- 55+ year olds are 167% more likely to go insolvent than their 18-24 year old counterparts;
- They are also 129% more likely to experience debt repayment problems;
- 1 in 4 (25%) indebted Britons are now struggling to meet repayments;
- Number of indebted Britons facing insolvency has risen 38% year on year.
Top tips
- Don’t bury your head in the sand. Try working out your financial position using the 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.
- If you cannot do a repayment plan and you do not want to go bankrupt then try an IVA. Visit IVA.co.uk or call the IVA helpline (0800 197 48 38).
- If you want to consider bankruptcy then try the Citizens Advice Bureau (citizensadvice.org.uk)
Useful contacts
- Ends -
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.
About James Falla
James Falla has advised people who have personal debt problems since 1997. During this period he has helped 1000s of people through the IVA process and worked with many others who have decided to undertake both Bankruptcy and informal Debt Management Plans.
James co-founded Thomas Charles (www.thomascharles.com) with William Berry in 2004 with the objective of providing clear impartial advice and solutions for people in serious debt. James has made numerous TV and radio appearances, including BBC1 News, BBC News 24, and Wake Up To Money
Notes to Editor:
All research was commissioned by Thomas Charles and Co and conducted by YouGov Plc.
April 2007 Survey: Total sample size was 2,274 adults. Fieldwork was undertaken between 17th - 19th April 2007. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
January 2007 Survey 1 (*): Total sample size was 2,315 adults. Fieldwork was undertaken between 9th - 11th January 2007. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
January 2007 Survey 2 (**): Total sample size was 2,740 adults. Fieldwork was undertaken between 18th - 22nd January 2007. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
October 2006 Survey: Total sample size was 2,322 adults. Fieldwork was undertaken between 11th - 13th October 2006. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
April 2006 Survey: Conducted online and fieldwork took place from 29th March, 2006 to 3rd April, 2006 and comprised an Omnibus followed by an in-depth survey on 1336 adults.
Please find below some key tables from the research.
How much is your current outstanding unsecured (i.e., excluding mortgage) debt?
OVERALL |
|
Apr-06 |
Aug-06 |
Oct-06 |
Jan-07* |
Apr-07 |
Less than £500 |
10% |
11% |
13% |
14% |
13% |
£501 to £1,000 |
5% |
5% |
6% |
6% |
6% |
£1,001 to £5,000 |
13% |
15% |
16% |
15% |
13% |
£5,001 to £10,000 |
10% |
9% |
10% |
9% |
11% |
£10,001 to £15,000 |
6% |
6% |
7% |
7% |
6% |
£15,001 to £20,000 |
4% |
3% |
5% |
5% |
3% |
£20,001 to £30,000 |
4% |
3% |
4% |
4% |
2% |
Over £30,000 |
5% |
1% |
4% |
4% |
3% |
Don’t know |
3% |
3% |
2% |
2% |
2% |
Prefer not to say |
11% |
10% |
7% |
7% |
11% |
I don’t have any debts |
30% |
33% |
28% |
28% |
29% |
Over £10k |
19% |
13% |
20% |
20% |
14% |
| |
Do you ever have problems repaying your debts? (All with debts over £10k)
OVERALL
|
|
Apr-06 |
Aug-06 |
Oct-06 |
Jan-07* |
Apr-07 |
Yes, every month |
9% |
11% |
15% |
9% |
11% |
Yes, most months |
5% |
3% |
6% |
6% |
9% |
Yes, quite frequently |
7% |
9% |
9% |
8% |
5% |
Yes but only occasionally |
28% |
26% |
28% |
31% |
34% |
No, never |
49% |
49% |
41% |
44% |
38% |
Prefer not to say |
2% |
3% |
1% |
2% |
3% |
Regularly (Quite frequently > Every month) |
21% |
23% |
30% |
23% |
25% |
|
How likely is it that you will become insolvent i.e. declare yourself bankrupt or take out an IVA? (All with debts over £10k)|
OVERALL |
|
Apr-06 |
Aug-06 |
Oct-06 |
Jan-07** |
Apr-07 |
Not at all likely |
86% |
80% |
83% |
82% |
81% |
Quite likely |
8% |
12% |
10% |
12% |
9% |
Very likely |
3% |
5% |
3% |
4% |
3% |
Certain |
2% |
3% |
4% |
3% |
6% |
Some likelihood |
13% |
20% |
17% |
19% |
18% |
|
How much is your current outstanding unsecured (i.e., excluding mortgage) debt?
AGE (April 2007 only)
|
|
18 to 24 |
25 to 34 |
35 to 44 |
45 to 54 |
55 + |
Less than £500 |
7% |
12% |
15% |
12% |
15% |
£501 to £1,000 |
5% |
4% |
8% |
7% |
5% |
£1,001 to £5,000 |
22% |
17% |
10% |
13% |
10% |
£5,001 to £10,000 |
12% |
16% |
13% |
12% |
7% |
£10,001 to £15,000 |
11% |
8% |
6% |
5% |
4% |
£15,001 to £20,000 |
5% |
4% |
3% |
2% |
2% |
£20,001 to £30,000 |
1% |
3% |
2% |
2% |
2% |
Over £30,000 |
1% |
3% |
4% |
4% |
2% |
Don’t know |
2% |
1% |
4% |
3% |
2% |
Prefer not to say |
9% |
9% |
13% |
11% |
12% |
I don’t have any debts |
26% |
21% |
20% |
29% |
38% |
Over £10k of unsecured debt |
18% |
18% |
15% |
13% |
10% |
| |
| How likely is it that you will become insolvent, i.e. declare yourself bankrupt or take out an IVA? (All with debts over £10k) |
|
18 to 24 |
25 to 34 |
35 to 44 |
45 to 54 |
55 + |
Not at all likely |
90% |
85% |
82% |
75% |
77% |
Quite likely |
3% |
8% |
7% |
14% |
13% |
Very likely |
1% |
3% |
3% |
3% |
6% |
Certain |
5% |
5% |
8% |
8% |
5% |
Some likelihood of insolvency reported |
9% |
16% |
18% |
25% |
24% |
| |
| Do you ever have problems repaying your debts? (All with debts over £10k) |
| |
|
|
|
|
|
|
18 to 24 |
25 to 34 |
35 to 44 |
45 to 54 |
55 + |
Yes, every month |
3% |
8% |
11% |
18% |
14% |
Yes, most months |
7% |
9% |
9% |
6% |
12% |
Yes, quite frequently |
4% |
7% |
4% |
4% |
6% |
Yes but only occasionally |
25% |
37% |
31% |
43% |
31% |
No, never |
55% |
37% |
41% |
29% |
34% |
Prefer not to say |
6% |
2% |
3% |
0% |
3% |
Regular repayment problems reported |
14% |
24% |
24% |
28% |
32% |
Further charts, tables and analyses are available on request.
For further information, please contact:
Emily Cagle (PR121)
Tel: +44 (0) 20 8832 1257
Mob: +44 (0) 78 9485 5722
Email: emily@pr121.co.uk
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