Consumers are becoming more comfortable with high levels of debt. That’s according to the Personal Credit Index survey from Experian’s Credit Expert service. Some six million Brits would not worry about their debts, excluding their mortgage, unless they exceeded £15,000. Included in this figure are 1.4 million people (5 per cent) who would only worry if their debts were more than £50,000.
Despite this, getting into debt is still seen as a no no, with 18 per cent of people naming bankruptcy as their most socially embarrassing event. Another 11 per cent said getting into debt would be more embarrassing than getting a divorce or being caught with illegal drugs.
According to the research consumer confidence is high, as Jim Hodgkins of CreditExpert comments: ‘The fact that so many Brits are happy with unsecured borrowing of at least £15,000 may seem shocking on first sight, but the ‘credit comfy’ generation seems to have become anaesthetized to the real implications of mounting debt. While many still see big debt as socially unthinkable, the reality is that an increasing number are finding it difficult to gauge when debt tips over to being unmanageable. With the current rise in interest rates, many will find that debt they blithely ignored is in danger of spiralling out of control.
The rise in consumer confidence is indicated by an increase in the number of those who are very comfortable with their borrowings from 29 per cent in January to 41 per cent now. Some 54 per cent of all adults are comfortable with their debt level, up six points from the previous index.
The index is based on MORI data from April 2007. It collects data on consumers’ future expectations and current credit confidence every quarter. Consumer confidence has risen in most regions except Scotland, where it has dipped.
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