Debts & Loans

The number of people in the UK struggling to repay their debts has escalated, with many of those previously considered affluent now said to be facing financial difficulties.

That is according to new research by the Consumer Credit Counselling Service (CCCS), a prominent personal debt charity, which has found that there has been a "fundamental shift" in its client base, as 47 per cent of those who seek advice now own their own homes.

Data from the CCCS also revealed that homeowners, on average, owe 83 per cent more than renters.

This leaves homeowners looking to raise funds through disposing of their unwanted endowment policy having changed their mortgage arrangements with the question of whether they should surrender their investment back to the life company, or sell it onto the secondary market.

A senior spokesperson for aap, the UK's largest buyer of unwanted endowment policies, said that recently more of its customers had sold their underperforming policy due to spiralling personal debt problems.

In answer to those individuals who have perhaps thought, "Should I sell my endowment policy?", aap can confirm that it has always paid more than the surrender value for an endowment when it has made an offer.

The UK's culture of personal debt could worsen significantly before it begins to improve, according to the chairman of CCCS, Malcolm Hurlston.

He said: "External forces over which the credit industry has no control including recession, unemployment, increases in the costs of everyday living and a falling housing market are compounding the problem of debt.

"These trends seem likely to continue for the foreseeable future; the perfect storm may have arrived, but we have yet to reach its epicentre."

Statistics from Credit Action, another debt charity, show that total UK personal debt stood at close to £1.46 trillion at the end of January this year.