Overdrawn, underpaid and over it: how four people conquered their debt mountains

"Debt carries a lot of shame, but it's more common than people might think. In the UK, 84% of adults had some form of credit or loan in the year leading up to May 2024. The average household holds about £2,700 in credit card debt, and it's only getting worse. Borrowing has been rising at its fastest rate for almost two years, with those hit hardest by the cost of living crisis increasingly using credit to pay for essentials."

"About 43% of the people who give us details about income and expenditure have a deficit. Factors such as job loss, poor mental health, illness, divorce or unexpected expenses, such as a car or boiler breaking down, can push people over the edge."

"Personality, upbringing, race and gender all play a part: ethnic minority groups face higher overindebtedness rates than white Brits; women are 68% more likely to use buy now, pay later services such as Afterpay, Klarna, Affirm and Zip; while neurodivergent people are more likely to make impulse purchases, lose track of outgoings and miss deadlines."

Debt has become widespread in the UK, with 84% of adults holding some form of credit or loan. The average household carries approximately £2,700 in credit card debt, and borrowing rates are rising at their fastest pace in nearly two years. Many people suffer silently, keeping their financial struggles hidden from family and partners due to shame. The National Debt Line experienced record call volumes, with 43% of clients showing income deficits. Various factors trigger debt crises, including job loss, illness, divorce, and unexpected expenses. Vulnerability varies by demographics: ethnic minorities face higher overindebtedness rates, women use buy-now-pay-later services at significantly higher rates, and neurodivergent individuals are more prone to impulse purchases and missed payments. Social media influencers increasingly fill gaps in financial literacy education.

Read at www.theguardian.com