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- Crack open the bubbly: today is debt freedom !
But don't too excited: this is just the hypothetical point in the year when workers have earned enough to merely service their debts -- and it has fallen more than a month later than last year.
The average Briton spends the first 70 days of the year working just to clear interest on credit card and loan debt, according to Unbiased.co.uk's annual survey.
That is 39 days later than last year, when debt freedom day fell on February 1.
Personal debt levels have increased by over 10 percent in the past year, and average levels of interest payable on this debt have increased by over 6 percent.
Personal loan debt is almost four times higher -- rising to 9.8 billion pounds from 2.6 billion pounds -- while interest rates on personal loans are 0.5 percent higher as the credit crunch takes its toll.
That means that Britons pay almost 1.5 billion pounds in interest payments alone.
Credit card debt, meanwhile, has declined slightly, to 54.9 billion pounds from 55.6 billion.
David Elms, chief executive of Unbiased.co.uk, which promotes independent financial advice, said: "This year's 'debt freedom day' is a real warning for UK consumers.
"Compared to last year we have spent almost two months longer this year to pay off the interest on our borrowings and this doesn't even take into account mortgage costs.
"In the current economic climate, it has never been more important for people to realise just how much it costs to service their debts and to ensure they have adequate funds available to do so."
Personal loan rates have increased by up to 4 percent in recent months, according to price comparison service Moneyfacts.co.uk. Lenders are also tightening their criteria on mortgage and unsecured debt, as they respond to higher perceived risk among borrowers.
The number of rejected mortgage applications surged by almost 60 percent in the six months to end-October, according to MoneyExpert.com, as five increases in the base rate since August 2006 started to bite and borrowers came up against tougher lending rules.
Since then, the Bank of England has cut the base rate twice to a current 5.25 percent, but some lenders have failed to pass the reductions on and fears are growing that more and more consumers will encounter serious debt problems.
But don't too excited: this is just the hypothetical point in the year when workers have earned enough to merely service their debts -- and it has fallen more than a month later than last year.
The average Briton spends the first 70 days of the year working just to clear interest on credit card and loan debt, according to Unbiased.co.uk's annual survey.
That is 39 days later than last year, when debt freedom day fell on February 1.
Personal debt levels have increased by over 10 percent in the past year, and average levels of interest payable on this debt have increased by over 6 percent.
Personal loan debt is almost four times higher -- rising to 9.8 billion pounds from 2.6 billion pounds -- while interest rates on personal loans are 0.5 percent higher as the credit crunch takes its toll.
That means that Britons pay almost 1.5 billion pounds in interest payments alone.
Credit card debt, meanwhile, has declined slightly, to 54.9 billion pounds from 55.6 billion.
David Elms, chief executive of Unbiased.co.uk, which promotes independent financial advice, said: "This year's 'debt freedom day' is a real warning for UK consumers.
"Compared to last year we have spent almost two months longer this year to pay off the interest on our borrowings and this doesn't even take into account mortgage costs.
"In the current economic climate, it has never been more important for people to realise just how much it costs to service their debts and to ensure they have adequate funds available to do so."
Personal loan rates have increased by up to 4 percent in recent months, according to price comparison service Moneyfacts.co.uk. Lenders are also tightening their criteria on mortgage and unsecured debt, as they respond to higher perceived risk among borrowers.
The number of rejected mortgage applications surged by almost 60 percent in the six months to end-October, according to MoneyExpert.com, as five increases in the base rate since August 2006 started to bite and borrowers came up against tougher lending rules.
Since then, the Bank of England has cut the base rate twice to a current 5.25 percent, but some lenders have failed to pass the reductions on and fears are growing that more and more consumers will encounter serious debt problems.
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