There is a total of Â£55 billion in ‘hidden debt’ in the UK according to a report in the Mail today. This debt, although public in the form of figures published by lenders, is hidden in that those who owe it have not told their family or friends.
It seems that as many as one in five borrowers refuse to admit to the actual extent of their borrowing. In many cases, because it is deemed excessive in their own eyes, it leads to sleep and eventual health problems through drink and comfort eating. With average debt at a tad under Â£10,000, most people will only admit to half of that to their loved ones.
Personal insolvencies reached a record high of 134,142 last year and it is still running into many thousands every month.
The report puts this down to people trying to ‘keep up with the Jones’s’ or trying to put on an outward veneer of success. Many women, 45% it seems, have hidden debt problems related to buying expensive fashion items.
But it may be more deep seated than that. Many have been made redundant or had pay freezes. This will put unbearable strain on their personal finances with the credit card then becoming a necessity not a nicety as the household bills and even the mortgage end up on the high interest plastic. From there the only way is down unless that plum job or the lottery comes up. It is not all people just frittering money away.
With increased unemployment and more taxes to come things are not going to get any easier for many families. Many more people may eventually find themselves in the same trap.
It is easy to just say ‘don’t spend what you haven’t got’, but that cuts no ice when you have hungry children. Then you look about at the injustice of bankers being bailed out and getting huge bonuses to boot.