Levels of borrowing reach new levels.
A report about UK debt has just been published. The typical Britons can expect to become debt-free at 69, 12 years later than they hope to. The Centre of Economics and Business Research report showed the extent of the debt crisis in the UK.
People typically hope to clear their debts by the time they reach 57, but the truth is that they are still more likely to have debt at the age of 65, the age most people would like to consider retiring.
The reality is that they are likely to have hit their 69th birthday before they have paid off all their loans. This research confirms the data obtained by the Office for National Statistics (ONS) on UK debt.
The UK adult population now has to wait until later to become “debt-free.” Someone aged between 16 and 24 could be 74 by the time they celebrate becoming debt-free, the report found. Rising property prices lead to more significant mortgage debts.
Throughout the UK, there are regional variations. For example, a homeowner in the North East could become debt-free at age 57, whereas households in London will not celebrate their debt-free birthday until around 20 years later—at the age of 77.
The report confirms that householders tend to be over-optimistic about the time it takes to repay their debts. Consumer research suggests that most people feel they could be debt-free by age 50. In reality, for most people, this is very optimistic
The report concluded that most people are 64 before non-mortgage debts are cleared.
UK Debt. Is it out of Control?
The report paints a dim future for the younger age group, 18 to 24-year-olds. This group is the most optimistic about paying off debt early, has the highest amount per person on average and will not pay off non-mortgage uk debt till the age of 66.
When mortgages are taken into account, the report found that households containing people aged 35 to 44 tend to be the most indebted, owing £87,800 typically. The average age of a first-time buyer is 31, and most households have mortgages and other financial commitments at this age.
How to help yourself
While it shows a big problem, there are ways to improve the situation from a personal perspective. The key to reducing debt is having a structured financial plan to repay debt and consistently reviewing income and expenditures on an ongoing basis. A review of expenses such as Gas, Electricity, Water, and other regular bills can help.
Long-term cash flow planning can really help you focus on the future and how to plan in the short, medium, and long term.
Obtain impartial advice from an independent financial planner that will help you focus on what is important not just now but in the future. An alternative is to contact the Citizens Advice Bureau.
If you want to learn more about cash flow planning, please contact us.
