Over two thirds of UK adults admit to debt problems and with many falling further into debt some are turning to the lottery, gambling and payday loans to help – are these good options to consider?
According to research by the Co-operative Bank, some 70% of UK adults admit to having debt problems. That said, those in debt don’t accept they have money worries until they have accumulated an average of £1,247 of debt in overdrafts, credit cards or loans.
Many though admit to having been in debt for 5 years or more.
The Co-operative Bank believes that those who are doing nothing to tackle their financial situation are suffering from the ‘DRIP syndrome’ where people with debt either:
Deny that they have debt
Rationalise the reasons why they are in debt
Ignore that they have debt
Postpone putting their affairs in order
Nearly 10% of people are resorting to gambling and the lottery to try and get rid of their debt problems. Some are also turning to payday loans providers.
Many suffer from ‘debtpression’, causing such as sleepless nights, feeling tense, having low self esteem and mood swings.
As Kim Stephenson, finance and psychology expert comments: “Ignoring debt, while a common reaction, is probably going to make the problem worse.
“Confronting the problems now will start you on the road to making your finances healthier and as a result, help you break out of the spiral of debtpression and alleviate many of the physical symptoms brought on by money worries.”
Robin Taylor, Head of Banking at The Co-operative Bank, said: “Managing your money with steps such as writing a list of incomings and outgoings and regularly checking your bank account will help you get on top of your finances now before problems get any worse.”
The Co-operative Bank has a number of solutions to help people manage their money better including a budget calculator, plus expert advice on its website and tips.
It is also offering customers offering extra help to its customers by removing interest charges on agreed overdrafts until the end of March.
MoneyHighStreet comments: “Ignoring debt problems really can be a recipe for disaster. The problems are unlikely to go away by themselves or indeed be resolved by turning to gambling or the National Lottery.
“Equally going overdrawn or taking out a short term loan, maybe a payday loan, to deal with a cashflow problem is very different from having to borrow money that you cannot realistically pay back within an agreed period.
“If your need to borrow money is as a result of deeper financial difficulty you’re facing, that your outgoings are consistently exceeding your income, it may be time to take more structured action to tackle your debt problems, seeking professional debt advice if need be.
“You can contact organisations such as the Citizen’s Advice Bureau, the National Debtline or the Consumer Credit Counselling Service to get some free, independent advice from the experts.”