More than one third (32%) of UK consumers have no idea how they plan to clear their debts, new analysis from Know Your Money has found.
In an independent survey of over 2,000 UK adults, the financial comparison site found that a quarter (25%) of Brits have skipped a scheduled debt instalment within the past 12 months. Meanwhile one in five (20%) have dodged repayment altogether.
Londoners have proven to be the worst culprits, with a whopping 27% admitting to completely reneging on squaring their debt.
Thoughtless spending could be to blame for London’s money troubles; 36% have used credit cards to make purchases without considering the long-term impact on their finances. Consequently, 43% of Londoners have regretted using credit cards to make frivolous purchases within the past 12 months.
This will likely impact Londoners’ financial futures, given that more than two-fifths (41%) of them have been refused some form of credit in the past twelve months.
Meanwhile, Welsh consumers struggle with punctuality, when it comes to squaring their debts; 32% admit to missing one or more scheduled payments in the past year.
In contrast, Northern Ireland and the South West appear to be more diligent when it comes to debt; the vast majority in both regions (89%) fulfil their payment commitments.
John Ellmore, Director of Know Your Money said: “People are quick to demonise debt, and they forget that it can be a useful tool, when managed responsibly.
“However, I must stress the term ‘responsibly’. It is important for consumers not to enter into debt without thinking about repayment plans. Additionally, banks and businesses must also bear some responsibility. Banks need to be aware of a person’s financial situation before encouraging them to take on debt – otherwise the results could be disastrous.
“By being more open about both the benefits and the risks of debt, consumers and banks can enter into a mutually beneficial arrangement, with minimal risk of missing repayments."
"People are quick to demonise debt, when it can be a useful tool, when managed responsibly. However it is important for consumers not to enter into debt without thinking about their repayment plans"
John Ellmore, Director, KnowYourMoney