Director, Financial Services Research

The disparity between homeowners and renters is examined in the latest edition of YouGov’s Debt Tracker.

Overall, our study indicates that 15.5% of adults in the UK are overly indebted. The report explores reasons for this, as well as issues facing the sector more generally. 

Those who are over-indebted experience heavy financial burden and, as a result, can be 3 months behind in commitments. Up to one quarter of their credit is insecure, and their total credit levels are up to 50% or more of their household income.

Housing availability and prices are becoming key contributors to indebtedness in the UK. There is growing discrepancy between home owners and renters: the average annual income of a home owner is £43,410, compared to renters who are on £25, 678. Those who rent their property are twice as likely (13%) to have to borrow money as home owners (6%).

Of those that are over-indebted, half are currently renting (49%), 25% have a mortgage, 8% are living rent free (including friend or relative’s property), while 9% own property outright

The demise of Wonga – where will people go now?

Earlier this year, much maligned payday lender Wonga went into administration. YouGov’s study indicates that one in ten (8%) of those who are financially distressed turn to payday loans: in fact, since 2015 the usage of payday loans had increased.

There is the issue therefore of where those people will turn to now that Wonga has disappeared. It is debatably whether another company will appear due to increased regulation. One option that we may see is less formal forms of credit filling the gap – whether that is loans from friends and family, or unsecured loans.

Those borrowing aren’t asking for help.

Our debt tracker reveals that one in ten in the UK are likely to borrow money in the next 6-12 months. However, just 7% who are considered financially distressed, and only 4% who are struggling to keep up with bills or credit commitments will seek independent financial advice relating to debt.

With an uncertain future ahead, this is one area in which more can be done in terms of marketing these services to the public.

Image Getty

All statistics in this article came from YouGov’s quarterly UK Debt Tracker

To find out more about YouGov's Debt Tracker and to subscribe - click here

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