£15,000 Is The New Normal

 

Home Shield Insurance conducted a survey amongst home owners and was shocked to discover that Britons attitude to personal debt has changed during the current financial climate, and anything up to £16,600 worth of personal debts is deemed manageable and normal. All of these statistics do include any mortgage related debts, and we refer only to personal loans/credits cards/finance and other personal borrowing.

 

People aged over 55 consider £14,500 as acceptable and manageable to them, and feel that they still have enough working life left in them to clear those debts. However this is the age where illness and health complications are beginning to show themselves more commonly, and threaten working potential.

 

The West Midlands have the highest regional debt with an average of £17,200 compared to a lower £13,500 in Yorkshire and Humberside. As a nation these statistics are worrying, and as a result of this, 62% of people will have to rely on family when they are diagnosed with an illness which will prevent them from working.

 

Sadly 15% of people assume that their employer would support them, and their family’s financially if they could not work due to a serious illness, and their mortgage and debts would be paid for them. The government’s statutory sick pay only requires employers to pay the statutory amount of £79.15 per week for 6 months. (based on current allowances at time of publication)

 

3% even believed that the state would support their family and home “in full” in the event of an illness! These results are alarming.
State benefits are meagre and often only a small per cent of a person’s earnings. Based on current debt levels, most of us are living beyond those earnings – so it is very irresponsible for people to believe they could manage on state benefits.

 

Critical Illness or death of the main income earner is one of the main reasons for repossessions, another reason would be redundancy – yet still us Britons fail to insure ourselves adequately against those things in order to protect those we love the most.

 

It is vital that individuals speak to a financial advisor to get those safety nets put into place. The current financial climate is an exact demonstration of why it is so important.

 

July 1st 2013

 

Source:
Mortgage Solutions -   http://www.mortgagesolutions.co.uk/mortgage-solutions/news/1936493/britons-unfazed-gbp15-personal-debt

 

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