Latest figures from Equifax suggest that consumers are managing their debts despite the cost of living increasing.
The latest Equifax research reveals that nearly 30% of people have no debt on store cards, credit cards, payday loans or other credit agreements payable over 12 months or less.
In addition, over 40% of consumers have the same amount of debt that they did 12 months ago, with over two thirds saying that their disposable income has either increased or stayed the same compared to last year.
Neil Munroe, external affairs director for Equifax, believes these figures demonstrate consumers successfully managing their finances and trying to pay off their debts even though they continue to face quite difficult economic circumstances.
He said: “Conducted ahead of this month’s Budget, our latest research provides insight into the way that people are managing their money and trying to put themselves in the best financial position as possible. It’s not surprising that consumers feel the pinch with daily expenses as the cost of living increases whilst earnings haven’t changed much, but it’s great to see that the increased financial pressure is being coped with well.
“Indeed, with 46% of respondents saying that they put savings away each month from their disposable income there’s a real sense of prudent financial management amongst UK consumers.”
One area of concern, however, that the Equifax figures have highlighted is the fact that nearly half of consumers would stop paying into their pension if their financial situation changed and they needed to make savings. Life insurance cover would also be stopped by over 40% of respondents to the Equifax research, and nearly half would stop paying their home building insurance.
“You can never know when your financial situation will change so it is important for consumers to keep track of their regular outgoings,” said Munroe.
“Consumers should keep a close eye on their finances, including regularly checking their credit report. It is not unusual to receive an unexpected high bill, particularly after the winter months, but having clear sight of your finances will put you in the best possible position to know how you can pay it off and where you could potentially cut back in spending.”
