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29/02/12 - Debt problems affecting 70% of UK adults

Over two thirds (70%) of UK adults* have admitted to having debt problems with almost a third of people (29%) not prepared to confront their debt issues according to new research released today by The Co-operative Bank.

The findings also show that those in debt do not believe they have money worries until they have accumulated an average of £1,247 of debt in overdrafts, credit cards or loans.

The Co-operative Bank believes that those who are doing nothing to tackle their financial situation are suffering from the ‘DRIP syndrome’ where people with debt either:

• Deny that they have debt
• Rationalise the reasons why they are in debt
• Ignore that they have debt
• Postpone putting their affairs in order.

As a result, more than one in eight are turning to gambling and the lottery to get out of debt, while one in twenty people are in debt to payday lenders, with around a quarter (22%) admitting to being in debt for five years or more.

The research also shows that half the population (50%) has slipped into further debt in the past year, with the average debtor building up £325 in extra debt since Christmas alone. Reasons for the debt ‘pile up’ include the rising cost of living (28%), increased energy bills (28%) and rising fuel costs (16%).

Robin Taylor, Head of Banking at The Co-operative Bank, said: “It’s no surprise that people are feeling the pinch at the moment and that debts are mounting up, but what is surprising is that many people are choosing to ignore their debt and are suffering from what we have identified as DRIP Syndrome.

“Our research also shows that the ‘debt alarm’ doesn’t go off until people owe more than £1,000, which can be a real struggle to pay back. Managing your money with steps such as writing a list of incomings and outgoings and regularly checking your bank account will help you get on top of your finances now before problems get any worse.”

The findings also show that one in three surveyed say their debt has led to a feeling of ‘debtpression’. Symptoms of ‘debtpression’ include sleepless nights (60%), weight gain (25%) and anxiety attacks (30%). As a result of this a fifth (22%) now don’t feel able to make any sound financial decisions, whilst 12% of people have borrowed more money to try to alleviate their symptoms.

Top 10 symptoms of ‘Deptpression’

Kim Stephenson, finance and psychology expert said: "Unfortunately, ignoring debt, while a common reaction, is probably going to make the problem worse. Confronting the problems now will start you on the road to making your finances healthier and as a result, help you break out of the spiral of debtpression and alleviate many of the physical symptoms brought on by money worries.”

The Co-operative Bank has a number of solutions to help people manage their money better including a budget calculator, plus expert advice on its website and tips. It is also offering customers offering extra help to its customers by removing interest charges on agreed overdrafts until the end of March.

Ends

Notes to Editors:

*Research by Opinion matters, carried out online between 7/2/2012 and 10/2/2012 questioning 1,510 UK adult respondents

For further information please contact

About The Co-operative Banking Group

The Co-operative Banking Group, formerly known as The Co-operative Financial Services, is the banking and insurance arm of The Co-operative Group, which is the world’s largest consumer co-operative with around six million members, over £14 billion turnover, and core business interests in financial services, food, travel, pharmacy and funeral care. The Co-operative Group has over 5,000 retail trading outlets.

Following the merger with Britannia on 1 August 2009, the organisation is one of the largest and most highly diversified mutual businesses operating in both retail and corporate markets.

As part of The Co-operative Group, the business is characterised by its unique ethical and member reward policies and very high levels of customer advocacy.

The Co-operative Banking Group has £70 billion in assets, 12,000 staff and nine million customers. It has over 300 high street branches, 20 corporate banking centres and major presences in Manchester, Leek, London, Plymouth, Skelmersdale and Stockport.

It is the only mutual organisation that enables its members to earn financial rewards for the products they hold, as well as giving them the opportunity to have a say in how the business is run.