Debt-ridden "in denial"
The majority of those in serious debt are in denial, researchers claim
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Thursday, 06, Sep 2007 01:14
Almost four million Britons are estimated to be 'overindebted' but the majority of them are in denial about their financial problems, new research has claimed.
In the UK one in 16 people (6.4 per cent) spend more than a quarter of their wages paying off unsecured debts each month, according to research conducted by debt management specialist Chiltern.
As such the government's guidelines define them as being overindebted, researchers say.
However just one in 45 (2.2 per cent) of those questioned in a survey for Chiltern admitted that their finances were seriously overstretched.
The poll of 1,000 people found that women were moderately more likely to be in denial about their finances, with just two per cent of women admitting that their purse strings were severely overstretched, compared to 2.5 per cent of men.
Those aged between 35 and 44 were found to be more in debt than any other age group, with 10.9 per cent of those questioned acknowledging that they paid more than a quarter of their monthly income servicing credit card and loan repayments.
In contrast just 3.2 per cent of those aged over 65 and 3.4 per cent of 18 to 24 year olds admitted to being in such debt.
East Anglia has the highest number of residents splashing out more than a quarter of their monthly income on unsecured debts, with one in nine (11.8 per cent) of people there doing so.
But just one in 43 people living in the region (0.7 per cent) think that they are in serious debt, the survey found.
In contrast those living in Lancashire and Wales were found to be the most realistic about their finances. One in 24 people (4.1 per cent) in Lancashire considered their finances to be severely overstretched, with one in 19 (5.2) per cent admitting that they paid more than a quarter of their monthly wage on credit and loan repayments.
Commenting on the results, Chiltern spokeswoman Joanne Gill said: "There are lots of people who are officially overindebted, but two-thirds of them don’t think they have a problem.
"Unfortunately debts don’t go away, they need to be repaid and ignoring them will just make the situation worse," she added.