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8.5m UK adults are at least £20,000 in debt with parents feeling money pressures most

02/02/2024
FINANCIAL AND CORPORATE
  • 84% of parents currently have more than one type of debt
  • 62% of all UK adults have debt, with 16% taking on at least £20,000 of debt excluding mortgages

Research from investment, protection and retirement specialist LV= reveals how UK households are turning to debt to ease rising living costs.
The LV= Wealth and Wellbeing Research Programme* - a quarterly survey of 4,000 UK adults - shows that people of all ages are becoming increasingly dependent on credit cards and loans.

Parents of children aged under 18 consider themselves to be struggling the most with rising debts. The research reveals:

  • 84% of parents hold more than one type of debt
  • Excluding mortgages, 43% of parents surveyed with children under the age of 18 have debt of £20,000 or more 
  • Overall, the most popular type of debt other than a mortgage, is at least one credit card (39%) 

People aged 18-34 are more likely to have higher debts from student loans (25%), bank loans (15%) or car finance (13%). Alternatively, 16% said that they have borrowed money from family or friends, while 7% have either a debt management plan or an Individual Voluntary Arrangement (IVA) to consolidate and pay off their debts.

UK adults aged 35-54, are more likely to face increasing financial pressures such as parenthood, mortgage costs and ageing parents to support. 59% said they were struggling or failing to afford day-to-day bills, with 7% missing payments on utility bills within the last three months.

Despite two-thirds (67%) of retirees stating that they could comfortably afford day-to-day costs, 41% said that they would struggle to pay an unexpected cost of £500. A third (33%) hold non-mortgage related debt such as credit cards and loans in retirement, which can be worrying for those living on a fixed income.

“Our research highlights the real impact of the current economic environment showing that when finances are stretched, many people will turn to credit cards, loans or family assistance. 

“As levels of debt increase, it is important to try and not neglect future finances either. About 20% of working people have reduced or stopped their pension contributions in the last quarter alone to help households with everyday bills. Cutting back on savings and pensions to cover costs now, could affect people’s chances of achieving a more secure retirement in the future.”
 
David HynamLV= Chief Executive