One type of debt that’s particularly common in the UK is credit card debt. And as of December 2020, the average credit card debt per person in the UK was £1,276, according to the Bank of England. That might not seem like a lot, but for a lot of people, it can be a significant amount of debt to carry. And high levels of credit card debt can lead to financial difficulties and can really hurt your credit score.
Another type of debt that people in the UK often have is loans. The average amount borrowed per person in the UK was £3,818 as of December 2020, according to the Bank of England. That includes both secured and unsecured loans. People take out loans for all sorts of reasons, like to cover unexpected expenses or to make purchases they otherwise wouldn’t be able to afford. But taking on too much debt can lead to problems, like difficulty making loan payments and a decrease in your credit score.
So what can we do to manage and reduce debt in the UK? Well, the first step is to create a budget and stick to it. This can help you track your spending and figure out where you might be overspending. It can also be really helpful to seek financial advice from a professional. They can give you guidance on how to manage and pay off your debt. And it might be worth looking into options for consolidating or refinancing your debt, to make your payments more manageable.
In short, the UK is dealing with rising levels of debt, and it’s something we should all be aware of. It can lead to financial difficulties and can hurt your credit score. But by creating a budget, seeking financial advice, and exploring options for consolidating or refinancing your debt, you can manage and reduce your debt.