Two thirds have unsecured debts

UK adults owe a total of £139 billion in unsecured borrowing on credit cards, personal loans, overdrafts and other credit facilities, according to research by MoneySupermarket.com.

The price comparison site found that two thirds of adults are straddled with some form of unsecured borrowing, owing an average of £4,412 each.

Key findings from the research:

  • 18-24 year-olds depend on credit more than other age group, owing an average of £5,446 each
  • 43 per cent of respondents owe more than they did last year
  • A quarter said that, though they were not in debt last year, they now have an average debt of £1,182
  • Two thirds were confident of paying off their debts this year and 12 per cent said it would take one or two years.

Kevin Mountford, head of banking at MoneySupermarket.com, commented:

"While rates are low at the moment, and the cost of borrowing is the cheapest it has been in a very long time, rates will inevitably go up at some point. Those who have fixed rate products are in a more fortunate position, but that fixed rate won't last for ever.

"Regardless of whether you have fixed or not, I would suggest trying to pay down as much debt as you can now before rates start to climb."