Britons growing more cautious of debt

Posted in Debt, General on Tuesday, April 17th, 2012 at 11:30 by Martyn Shaw.

Insurance firm Bright Grey has released their annual “Financial Safety Net” report, revealing that Britons are beginning to become more aware of the importance of effective debt management.  According to the report, UK residents consider debt levels above about £14,500 to be problematic.  A year ago, Britons were somewhat more tolerant of large debt loads; they only considered people to be in danger of default once they owed in excess of £16,000.

Such high debt levels make it more likely that individuals will no longer be able to meet their regular obligations such as mortgages or a car loan.  Bright Grey’s Proposition Director, Roger Edwards, commented on the survey’s findings: “Over the past 12 months, Britons are sitting up and taking greater notice of the wider economic environment.  People are more wary about getting themselves into serious levels of personal debt, but over £14,000 is still clearly a cause for concern.  As a result, Britons need to keep control of their finances and have contingency plans in place to be able to continue to pay for their essential monthly outgoings.”

People with high debt levels can take a number of steps to get their finances under control.  These include seeking out additional employment in the form of a second job – though that strategy is difficult at present due to high unemployment levels in the nation.  Other powerful strategies include developing a strict budget for expenditures, and more importantly, sticking to it.  The funds freed up from more prudent spending can be used to make larger debt payments.  Another option is to purchase income protection insurance, which can provide funding in cases of redundancy or a serious illness that can take a worker off the job.

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