2 million people in Britain have debts over £10,000

2 million people in Britain have debts over £10,000

	Published : Tue, 18 Apr 2006 08:55 By : James Rowe Print this Story

LONDON: Nearly two million people in the U.K. owe more than 10,000 pounds on credit card dues, overdrafts and other unsecured loans, according to a new survey. About 500,000 people owe more than 20,000 pounds, the survey, conducted by GfK NOP for debt consultants One Advice, found.

Half of those people having debt of 10,000 pounds had taken loans, some 350,000 have used credit cards for funds and nearly 83,000 had taken personal loans from family and friends, the survey found. Most of the personal borrowings had been in the form of mortgages, where the loan is secured on properties.

The survey found that people in the age group pf 35-44 are most likely to have substantial debts with around 650,000 owing more than 10,000 pounds.

Chris Holmes, chief executive of One Advice, said with several unsecured borrowing products in the market, which have high interest rates, many people are entrapped in debt, "often only paying off the interest accrued every month as opposed to the capital they have borrowed". These people will have to take necessary action to get out of the situation, otherwise they will fall further into debt, cautioned Holmes.

What is worrying, according to One Advice, is that quite a number of young people have also amassed five-figure debts -- over 200,000 in the age group of 18 to 24 years have been found to be owing more than 10,000 pounds. This is equivalent of one out of every 20 people in the age group.

In 2005, some 70,000 people in England and Wales had declared themselves insolvent.

The survey brought out a positive factor -- that increasing number of people are getting into deals with their creditors through individual voluntary arrangements, which calls for partial payments.

The government had announced a provision of 45 million pounds to employ 500 independent debt advisers in England and Wales to help people get personal advice on how to handle debts.