Despite cost of living, study finds personal debts in Exeter have decreased by 28%
New data from personal insolvency provider, Creditfix, has revealed that average debt levels in Exeter have decreased by 28% since 2020.
The Personal Debt Index is compiled by using data from over 185,000 people across the UK who have received help with their finances through an IVA or Trust Deed with Creditfix.
As the cost-of-living crisis continues, many households are struggling financially and increased levels of debt is a real worry for many.
According to the Office for Budget Responsibility, UK households will spend £83billion in servicing debts (mortgages, credit cards and personal loans) in 2023-24 – an increase of 52 per cent from 2022.
It comes as no surprise that this has had a huge impact on unsecured debts. By the end of December 2022, Creditfix revealed the average total of unsecured debt per adult stands at £14,400.46 in the United Kingdom.
However, Exeter has seen debt levels drop since 2020, from £20,216.37 to £14,482.67, a 28% decrease, with 26-35 year olds holding the lion's share of the debt (43.9%).
Whilst this is encouraging news, since 2022 Creditfix has seen a whopping 408% increase in customers reporting that they are struggling with debts under £2,000.
Layla Johnson, regional manager at Creditfix commented,
“The cost of living crisis has wreaked havoc on the economy with the UK currently experiencing the highest inflation rate in over 40 years and the biggest drop in living standards in over 60 years, and it looks like people are struggling and seeking debt help with lower levels of debt sooner.
“Salaries have stayed pretty much the same between 2020 and 2022, the increase in the number of people struggling to manage smaller levels of debt in 2022 and going into 2023 would indicate salaries just aren’t stretching as far after the pandemic with inflation on the rise.
“It’s great that more people are beginning to feel comfortable speaking about and seeking support for their financial worries, but these findings highlight that more people are financially over-stretched and finding it difficult to pay off smaller levels of debts.
“It is also worth remembering that, whilst the economy is set to return to normal during the tail-end of 2023, it could be late 2024 until the cost of living decreases and the impact of these changes are fully felt by the consumer.”
To help the nation make the first steps in their debt recovery journey, Layla has shared her advice to help Britons take control of their finances:
Develop a complete understanding of your financial situation
Coming to terms with your own financial situation is a vital first step to find a solution. Taking the time to properly process your finances will create a better picture of the key issues, helping you to manage the emotional effects of being in debt while building strong foundations for moving forward.
Set up budgeting habits
Creating a realistic budget of all living costs, including rent or mortgage payments, council tax, TV licence, utility bills, broadband bills, food and transport will give you a better idea of what finances you have left to play with for the rest of the month, once all essentials are paid for.
Don’t bury your head in the sand
It might not be easy to hear but listening to others opinions can help see a financial situation in a new light, and others may be able to help you find the best support. Opening up about financial difficulty can often be a difficult conversation with many fearing judgement and embarrassment. Talking to people who will be patient and understanding will help with this. The sooner people talk to a trusted someone about their debts, the sooner they will be able to seek solutions and fix the problem.
For more information about Creditfix, visit www.creditfix.co.uk
