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Debt in the UK – Perception Versus Reality

by Sarah Halloran

You can’t open a newspaper these days without reading articles about debt and how the UK is drowning in it.  Of course dramatised stories and over-egged reports sell newspapers, but what do the general public think?  What is the perception of UK debt versus reality?  It’s true that many people are struggling with debt and it’s fair to say the reccession has been the catalyst of many a personal debt problem.

In the UK we are quite secretive about our debt.  It’s one of those taboo subjects that never really comes up.  It’s considered crass to wave a platinum credit card around these days and we tend to keep any debt problems to ourselves or at least within our own four walls.  Perhaps if we were more open about debt and debt problems we could find a way to get help more easily.

A recent survey conducted by Payplan asked a section of the UK public seven questions about their perceptions of debt.  The short survey was designed to explore our thoughts about gender, marital status, housing status, total amount of unsecured debt, monthly income, the regions where debt is more prevalent, and how long it would take to pay back their debt.

Let’s take a look at those questions and the results.  In some areas the perception is pretty close to reality, but in others it’s way off!

For example, a large percentage of those questioned thought that renters were most likely to have debt problems when the reality is it was the homeowners that came out on top.  Of course, homeowners usually have more secured debt in the form of mortgages, but the survey was focusing on unsecured debt and particular debt problems.

Another question asked how many years it would take to pay off a debt management plan to clear a debt.  21% thought it would take 13 years whilst 18% thought it would take 5 years.  The reality is 9 years for most people.

Marital status was also an interesting question.  A lot of those surveyed believed divorced or separated people to be most likely to have a debt problem when it was in fact singletons who came out top.

The infographic below shows perception vs reality in clear detail.  It’s interesting to see how much of the UK is affected by debt and it’s clear to see that our perception is a lot different to what is actually happening out there.

Of course, it goes without saying that you should only take on debt if you can afford the repayments.  Debts like mortgages and personal loans will usually take years to pay off so know what you are getting into before you sign on the dotted line.

Payplan Debt Perceptions Infographic 2011

Source: Payplan – IVA and Free Debt Management Plan provider.

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