The UK sees its fair share of people in debt each year. But the public perception of debt still seems to be a little bit off from the reality. For people that haven't been in debt themselves, there seems to be a general perception that debt is caused by living beyond your means. This isn't the case at all, and in fact the statistics show that overspending is the lowest out of all the causes of debt there are.
As such, you may already have guessed that it's losing a job, or having pay downgraded that leads to most people ending up in debt. Taking out a mortgage or other loans when you're in steady employment is a rational decision, but with times as they are, many people are finding that once-secure jobs are being made surplus. The result is that people have taken on payments that they can't keep up with, but also don't want to lose the thing they've taken out the loan for. This is the most common type of debt by far: accounting for over 40% of UK debts.
Changes aren't just in the workplace though. Our personal lives are a major factor in how our bank balances are, even if you wouldn't usually directly correlate the two. If you go through bereavement, a breakup, or illness, it can all lead to your losing time at work, losing money, and ultimately being left without the ability to pay for things. Divorce especially can be incredibly taxing on someone when it comes to preserving your finances.
Just 10% of all debts in the UK are accounted for by people spending too much money on consumer items. The lure of deals, and the flexibility of credit cards, can mean people make poor budgeting choices. But this really is just a tiny fraction of the causes of debt.
As such, it's unfair that so many people associate debt with poor decision-making. The depressing reality is that debt is something that can happen to anyone, and that circumstances can change to make you face a financial crisis. If that's been the case for you, you should be reassured that there is a well-tested system in place for these eventualities, and that you can get help.
As such, you may already have guessed that it's losing a job, or having pay downgraded that leads to most people ending up in debt. Taking out a mortgage or other loans when you're in steady employment is a rational decision, but with times as they are, many people are finding that once-secure jobs are being made surplus. The result is that people have taken on payments that they can't keep up with, but also don't want to lose the thing they've taken out the loan for. This is the most common type of debt by far: accounting for over 40% of UK debts.
Changes aren't just in the workplace though. Our personal lives are a major factor in how our bank balances are, even if you wouldn't usually directly correlate the two. If you go through bereavement, a breakup, or illness, it can all lead to your losing time at work, losing money, and ultimately being left without the ability to pay for things. Divorce especially can be incredibly taxing on someone when it comes to preserving your finances.
Just 10% of all debts in the UK are accounted for by people spending too much money on consumer items. The lure of deals, and the flexibility of credit cards, can mean people make poor budgeting choices. But this really is just a tiny fraction of the causes of debt.
As such, it's unfair that so many people associate debt with poor decision-making. The depressing reality is that debt is something that can happen to anyone, and that circumstances can change to make you face a financial crisis. If that's been the case for you, you should be reassured that there is a well-tested system in place for these eventualities, and that you can get help.
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