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Debt: living on `financial precipice`

15/03/2010

According to research by YouGov, commissioned by credit reference agency Callcredit, 26% of mortgage holders would be unable to make repayments to their mortgage debt if their monthly income was to drop by up to £300.

The findings also revealed that one in eight adults aged 35-44 has deliberately `over-inflated` their income so lenders would allow them to take on more debt.

Managing Director of Callcredit, Graham Lund, said: "These statistics are extremely alarming. A significant proportion of people aged 35-44, many of who may have families to support, are living on a financial precipice, where just one negative event, such as a reduction in paid overtime or an unexpected expense could have disastrous financial consequences.

"If the borrower is inflating their income significantly and then maxes out their high credit limit, they are running a serious risk of getting into financial difficulties and being unable to repay the debt."

Meanwhile, the research also revealed that the proportion of people paying off their credit card debt in full each month had dropped, with 5% of people who previously paid their debts off in full now just paying the minimum or fixed amount each month.

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More than 4 million fear they`ll be made redundant 16/12/2010 - According to R3`s quarterly personal debt tracker, more than 4 Consumers took on more mortgage debt in July 26/08/2010 - Consumers took on £2bn more mortgage debt than they repaid Debts called in by parents 26/08/2010 - According to research, `the bank of Mum and Dad` is Teenagers `scared of debt` 19/08/2010 - Nearly two thirds of teenagers are `scared` of debt, according