More than one in five cash-strapped Brits spend every single day of their lives worrying about money, a new study reveals.
The equivalent of 11 million people are financially stressed and struggling to balance household budgets.
Young people aged 18 to 34 are suffering the most as more than half said they frequently worried about their finances.
The research from Moneysupermarket.com reveals this is having an impact on more than just bank balances as a fifth said money worries affected their health and similar numbers admitted it had an impact on their relationship.
There’s no relief in sight as two-fifths of those already under financial pressure believe their anxiety will get worse in 2017.
Figures from the Bank of England show household debt has hit a staggering £1.5trillion.
The amount of unsecured credit – borrowing on credit cards, personal loans and other forms of credit, but not including mortgage debt – has soared at the fastest rate since 2005.
There are major concerns that inflation will rise throughout 2017, pushing up everyday living costs and this will impact on people’s ability to repay this escalating debt.
Debt charities are bracing themselves for a deluge in calls from people asking for help.
Joanna Elson OBE, Chief Executive of the Money Advice Trust, the charity that runs the National Debtline, said: “Consumer credit continues to soar, and this is something we should all be concerned about amidst the current uncertainty over the UK economy.
“These figures are even more stark when you consider that they only take into account some of households’ pre-Christmas spending. Our research shows that one in three Britons put Christmas on credit – and we are already seeing a surge in people contacting National Debtline for advice as a result.”
The 2008 financial crisis showed that increasing levels of debt can devastate lives and leave families unable to cope.
“A sudden change in circumstances and drop in income can pitch people quickly into hardship,” warned Peter Tutton, Head of Policy at StepChange Debt Charity.
“Lenders, regulators and the Government need to ensure that the mistakes made in the lead-up to the financial crisis are not repeated and that there are better policies in place to protect those who fall into financial difficulty.”
Financial experts say credit is cheap with rock bottom interest rates and easy to access meaning people can quickly rack up large debts.
The worry is that borrowers are not preparing themselves for how long it could take to repay debt or bracing themselves for increasing interest rates that are expected later this year.
How to tackle debt now
- Go through your budget and see if there are any things you can cut back on to save a bit of money.
- Make sure you are not overpaying on any of your basic bills. It’s simple to switch on to better energy deals or insurances.
- If you are paying high interest on credit card think about switching to a 0% balance transfer deal – there are cards available with up to 42 months interest-free. But, ensure you make repayments on time each month or the 0% offer will be stopped immediately and you’ll be hit with high interest charges.
