How Much Debt is Too Much?

Some people would worry if they owed five pounds. Others wouldn’t be concerned if they owed fifty thousand!

Most of us would fall somewhere in between the two, of course. But the level of people’s ‘immunity’ to debt worries might be a lot higher than we previously thought. A recent report from Scottish Provident calculates that the average borrower doesn’t really start worrying until their debt is over £15,837.

That’s just an average, of course, and many people wouldn’t take on anywhere near that amount of debt without getting seriously worried about it. At the same time (given the way that averages work), that means there are plenty more people who’d let their debts get well past that point before they started losing sleep over them.

As Scottish Provident put it, “the nation as a whole is worryingly immune to the financial reality of being so heavily in debt.”

Quite a good way of putting it – in many ways, it would be a lot healthier if people were a bit more worried about their debts!

After all, someone might be able to afford their payments on this kind of debt right now, but what if something happened? What if they lost their job? And what about when (not if) the base rate goes up, taking millions of people’s mortgage payments up with it?

That’s not to say we should all be panicking about our debts – but we’d certainly do well to get some advice, at least.

A few debt management tips could make all the difference. A debt adviser could point out how much we’re likely to pay in interest if we don’t take a more pro-active approach to our debts. They should also be able to advise us on what that approach might be exactly, giving us a few practical tips on what to do next. For further advice on debt management visit http://www.dacscotland.co.uk/debt-management/