Debt problems making Brits `financially unfit`
20/12/2007
We have all heard of obesity but a recent survey has found that over two-fifths of Brits are now financially "unfit". Debt problems throughout the UK have got so bad that a number of experts have declared that the country is on the verge of a debt "epidemic", similar to that which has been claimed of obesity.
The similarities between the growth in debt and the rise in obesity are striking. Over the past decade, the availability of easy credit has enlarged the debt boundaries, much like the alleged effects of fast food. As a result, debt problems have grown so much that, according to research by Abbey, only one per cent of Brits are "financially fit".
However, the problems are not purely down to the accessibility of credit. Many Brits have not partaken in financial exercise and moved to a cheaper mortgage company. A quarter of consumers have not shopped around for insurance quotes, while 70 per cent of women have no savings.
Sue Hayes, director at Abbey, suggests that, like weight problems, there is a general lack of effort on the part of the consumer when it comes to financial organisation.
Ms Hayes said: "The research suggests that the majority of people are in need of a financial workout to get their finances in peak condition for 2008. As many gear up to shift the pounds they pile on over the festive period, we would encourage people to review the financial products they hold and shop around to ensure that they are getting the most competitive deal available.
"Like exercise, a financial workout can take a bit of effort, but for most people the rewards are well worth the exertion."
So, like many keep-fit regimes, a kick-start may be needed to get Brits into financial shape. A timely push may come in the form of the credit crunch. Over the last few weeks, the effects of the autumn`s financial crisis have been passed on to consumers, meaning tighter credit conditions and fewer approvals on mortgages. Many people are tightening their financial belts when it comes to Christmas presents too.
Colin Jackson, director of Baronworth Financial Services, said: "The way things are currently and they have been for some while, people are finding it very tough to put money aside each month for long-term or even short-term savings."
Tim Moss, head of loans at moneysupermarket, stated that debt has become part of the British psyche for a long time and a large scale change needs to occur.
He added: "People need to be careful that the ease of getting credit doesn`t catch them out. It can soon spiral into a debt sentence. Forty years ago, being in the red was a last resort. It seems many of today`s Brits are much more accustomed to taking on debt - although being able to control it is quite another thing."
Like all fitness plans, it will require time and effort to fix the UK`s debt weight issues. Some consumers may be in for the long-haul. Recent research by Fool suggested that two-thirds of borrowers will take over seven years to clear a non-mortgage debt of £11,000. Interest rate cuts may help that time scale but many will be in for the long-haul.
As festive thoughts turn towards new year resolutions, the traditional view of getting fit may have to take on more than one meaning this year if consumers are to avoid an over-inflated financial waistline.
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