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Debt: living on `financial precipice`

15/03/2010

According to research by YouGov, commissioned by credit reference agency Callcredit, 26% of mortgage holders would be unable to make repayments to their mortgage debt if their monthly income was to drop by up to £300.

The findings also revealed that one in eight adults aged 35-44 has deliberately `over-inflated` their income so lenders would allow them to take on more debt.

Managing Director of Callcredit, Graham Lund, said: "These statistics are extremely alarming. A significant proportion of people aged 35-44, many of who may have families to support, are living on a financial precipice, where just one negative event, such as a reduction in paid overtime or an unexpected expense could have disastrous financial consequences.

"If the borrower is inflating their income significantly and then maxes out their high credit limit, they are running a serious risk of getting into financial difficulties and being unable to repay the debt."

Meanwhile, the research also revealed that the proportion of people paying off their credit card debt in full each month had dropped, with 5% of people who previously paid their debts off in full now just paying the minimum or fixed amount each month.

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Debt Advisers Direct offer free debt advice and a range of debt solutions, including debt management plans, debt consolidation loans and IVAs (Individual Voluntary Arrangements).

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