Debt Repayments Taking Up 10 Per Cent Of Family Income

Fri, 20 May 2011

Families across the UK are struggling to cope with an increase in day-to-day living costs and unsecured debts, according to new research by Aviva .

The insurer’s latest family finances report suggests that the average family now spends 10 per cent of their monthly income servicing their debts, up from 8 per cent at the start of the year.

Parents with two or more with children appear to be struggling the most, with the research showing that their level of unsecured debt has risen by nearly £1,000 since the beginning of the year to £6,200. Those with one child have seen a similar increase over the last five months to £5,452.

It also found that more families are now worried about further increases in the cost of basic necessities and rising mortgage interest rates .

However, the typical family is managing to save more and now has £1,163 in savings and investments, compared with £849 at the start of 2011.

Commenting on the findings, Paul Goodwin, head of pensions marketing at Aviva, said: "Many families have higher unsecured debts and have seen an almost blanket increase in day-to-day living costs is deeply concerning."

"They are worried about the future with almost two-thirds anxious about any increases in the cost of basic necessities over the next six months."

"It serves to highlight the precarious balancing act that many face today as they look to meet their financial obligations and provide their families with some type of financial security."
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