Family debts equal half their annual income

Wed, 16 Nov 2011

UK family's suffering with debt difficulties typically owe the equivalent of nearly half their annual income, it has been found.

According to new research from Aviva, 52 per cent of the nation's households currently have unsecured keyworddebts, with the average level of arrears totalling £10,604.

The report showed many families are living with loans, overdrafts and credit card bills, yet one-quarter are unable to spend money on holidays and 52 per cent have no budget in place for children's activities.

Despite the investigation revealing typical monthly incomes have risen by £46 a month since January, food bills, energy costs and transport fees have also jumped considerably.

Paul Goodwin, director of workplace savings at the insurer - which has 36,100 employees and serves around 44.5 million customers around the world - said: "We have found that UK families are cutting out luxuries, economising on spending and reducing the typical amount they save."

In addition, the study revealed 31 per cent of those questioned are providing financial assistance to friends and family in the form of loans and gifts - to the tune of around £442 a year.
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