Almost 60 % of Britons are less worried about their personal debt than they were a year ago, according to new research from the consumer and business analysis group MindMetre.
This seems to confirm government reports that debt has fallen relative to income for the first time since 2008.
The report shows that compared to last year, Brits have found their personal levels of debt have fallen significantly but they are not resting on their laurels, as the survey shows that UK consumers are planning to reduce their personal debt even further.
60% say they will focus on shrinking their high-interest-rate credit card debt;
52% will focus on reducing their mortgage, usually representing the largest source of personal debt;
44% report they intend to reduce other forms of unsecured debt such as student loans, other loans and overdrafts.
To ensure the research was reflective of the full UK demographic, the 2000 UK residents that were asked evenly spanned ages, UK regions and social backgrounds. It found that the majority of people (59%) confirm that they have good reason to feel less worried about debt.
While there are signs that the UK economy is picking up, such as rising house prices, MindMetre go on to say that household debt, including mortgage debt, was recently reported to have reached a record high.
As well, the Office for Budget Responsibility (OBR) also warned that wage growth in the UK is not expected to return to normal for another two years which, combined with rising house prices and wage stagnation this may result in may result in an erosion of people’s savings and difficulty to pay back debt.
Paul Lindsell, Managing Director at MindMetre Research, said:
“This research reveals that the public is optimistic about their personal finances and in particular that personal debt worries are decreasing.
“But, as Britons report that they have reduced their debt, official statistics warn that increasing house prices and low wage growth may drive up borrowing.
“This would defeat the repayment objectives voiced by large part of the population and drive savers, who have already been suffering from low interest rates, to dip into their nest eggs.”
You can find the full report from MindMetre by clicking here.