Almost half of Brits are in some kind of financial debt, with 15% of those turning to illegal money lenders, according to a new study.
In a survey, from savings site VoucherCodes, found that 48% of respondents say they are in at least one type of debt — excluding mortgages — with credit card spending (78%) and overdraft repayments (44%) being the main reason they owe money.
People in Edinburgh are most likely to find themselves in some kind of debt (55%), with over half of the residents of Derby and Cardiff also admitting to owing money (both 53%).
Perhaps more surprisingly, 15% of all respondents who owe money say that they are indebted to loan sharks — owing £744 ($959) on average.
There are stark generational differences too, with millennials going down the loan-shark route to obtain extra cash more than any other generation (23%). They are also big users of payday loans and “buy now, pay later schemes — both used by more than half of in-debt 25 to 34-year-olds (52%).
When asked how much money it takes to be “in debt”, millennials say they wouldn’t classify themselves as such until they owed £5,773. This is 36% higher than the amount those aged 55 and over would consider to be the threshold of being in debt (£4,246).
But, when it comes to trying to get out of financial difficulty, those aged 18 to 24 are far less likely to cut on experiences such as holidays (32%) than those aged 55 and over (63%). Instead, more than two in five 18-24-year-olds would rather turn to their parents to overcome their financial troubles (42%). In the case of nearly one in 10 in the age group of 18 to 24, though, they consider debt to be nothing more than an “inevitability” and not something worth worrying about (9%).
Anita Naik, Lifestyle Editor at VoucherCodes, said: “While avoiding debt can sometimes be difficult, it is concerning to find such a high proportion of people have turned to illegal money lenders as a way to obtain finance. This is something that should be avoided at all costs — there are other measures that can be taken to help reduce debts instead.
“For example, while some may be hesitant to forgo holidays or even smaller recurring costs such as subscriptions to streaming services like Netflix or Spotify, cutting back can really help to save money. Our research shows that this is the most popular solution, with half of respondents saying they would miss out on Netflix or trips away in order to reduce their debts.
“Spending is of course inevitable, but in order to do so within your means, it’s worth considering easy steps like using discount codes to take advantage of the savings available to you when you shop.”