ALMOST one third of British people don’t believe they will ever clear their debts, according to new research.
The survey by credit reporting agency Equifax also found that 12 per cent of people do not think they can even reduce their debt levels.
Young people are the most pessimistic with only half of 18-24 year olds confident they can clear all their debts.
“There’s a clear generational divide when it comes to the perception and treatment of debt, with younger people feeling less confident of ever being debt-free,” said Richard Haymes, head of financial difficulties at TDX Group, an Equifax company.
“This may be down to factors such as increasing levels of student loans and exponentially higher property costs, as well as a prolonged period of low interest rates, which means credit for those who can afford it is relatively cheap to access.
“With inflation hitting a six-month high in August, a recent interest rate rise and limited wage growth, it’s disconcerting that a large proportion of people are taking on debt without a realistic expectation of being able to pay it back.”
The Equifax research found that the most popular methods for economising included shopping at budget supermarkets and spending less on holidays.
The survey follows the publication of UK Finance’s August figures, which showed credit card spending was 7.6 per cent higher than a year earlier, with outstanding levels on card borrowing growing by 5.8 per cent over the year.
“According to our analysis, personal insolvencies are set to grow by 17 per cent this year, and the main contributing factor is record levels of consumer borrowing,” said Haymes.
“We encourage individuals who feel their debt levels have become unmanageable to inform their creditors as soon as possible and to seek impartial advice and support through resources such as StepChange and Citizens Advice.”