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Increase in unsecured debt rising among families
There has been a sharp increase in the number of families in unsecured debt, according to the latest Family Finances Report from Aviva.
It found that the average credit card, loan or overdraft debt has increased from £5,360 in January to £5,878 in May.
Indeed, debt repayments now take up ten per cent of a family's monthly income.
"As inflation rises, family budgets are squeezed, and as we know that wage increases are typically not keeping trend with the rise in prices, household budgets are squeezed even tighter," explained Joanna Parsley, associate director of money education charity Credit Action.
She said that it is "vital" that families budget well, track their spending and seek advice if they need it.
The Aviva study did find that since January, families are saving and investing more money - around £10 a month more at £1,163 a month - suggesting that they are taking control over their finances.
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It found that the average credit card, loan or overdraft debt has increased from £5,360 in January to £5,878 in May.
Indeed, debt repayments now take up ten per cent of a family's monthly income.
"As inflation rises, family budgets are squeezed, and as we know that wage increases are typically not keeping trend with the rise in prices, household budgets are squeezed even tighter," explained Joanna Parsley, associate director of money education charity Credit Action.
She said that it is "vital" that families budget well, track their spending and seek advice if they need it.
The Aviva study did find that since January, families are saving and investing more money - around £10 a month more at £1,163 a month - suggesting that they are taking control over their finances.
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Published: 24/05/2011
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