LONDON, October 21, 2011 /PRNewswire/ --
4.6 million Brits are in less debt than a year ago but 32.8 million fear that access to credit will dry up over the next twelve months, new research reveals.
The latest Credit Confidential Credit Index shows that one in ten UK adults are less in debt than a year ago - a dramatic increase on the first six months of 2011 when less than two per cent managed to improve their financial situation. Significantly, people in every part of the UK are now less indebted, with Scots leading the way in offloading their debts.
This tightening of household purse strings could prove to be a wise move as two in three Brits (67 per cent) think that it will become increasingly hard to get credit - from mortgages to mobile phone contracts. This is an increase from July when the figure was just three in five (62 per cent) and comes at a time when many families are struggling with rising prices.
Paul Lewis, Vice President of Credit Confidential, said: "The recent debate stoked by David Cameron suggesting people pay off their credit card bills seems to be redundant as many of us have been offloading debts in the past three months anyway. However, with Christmas coming, unemployment rising and inflation increasing, if consumers cannot access credit easily from the High Street and traditional lenders, some may be forced to borrow from less reputable sources such as loan sharks."
Credit Confidential's research shows there are big differences when it comes to how wealthy and less wealthy Brits view getting credit. People earning over £55,000 a year are increasingly optimistic about access to credit, with only half (53 per cent) thinking it will become harder over the next twelve months. This is in stark contrast to people earning below the average salary (£21,300 per year) - three quarters of who think credit conditions will get worse for them over the coming year.
With unemployment rising amongst the over-50s, there has been a steep rise in middle aged people looking to get unsecured credit. In the past three months, the number of applications among 45-54 year-olds more than doubled, rising by 102 per cent. Meanwhile, poor jobs prospects for younger people have driven up demand for credit, with applications for unsecured loans among 18-24 year olds increasing almost two-fold (86 per cent) since July.
SOURCE Credit Confidential