(1888PressRelease)
April 19, 2007 - A report recently published by Credit Action, a national money education charity, shows that by the end of February 2007, personal debt in the UK reached £1,310 billion – up by 10.5% since February 2006. In total, there is £116 billion more personal debt now than a year ago.
Another financial report reveals that consumer debt is increasing at a rate of £318 million per day and that roughly 300 people in the UK have to seek an IVA or declare themselves bankrupt every single day.
According to Citizens Advice, a registered charity for legal and financial advice, people are becoming increasingly worried about their personal debt problems and that it deals with 5,300 debt problems each day.
A sample survey carried out by the Department of Education and Skills indicates that debt problems will be more severe for the current generation of teenagers, as they are ‘disturbingly financially illiterate’.
Their report shows that 40% of the young generation in the UK is not aware of the real meaning of APR and that 25% of the 16 to 21 years old believe that store cards offer better value than credit cards.
The report also shows that 83% of parents are apprehensive about their children’s understanding of financial matters and feel that their children will accumulate significant debts in the near future.
However, despite the concern – 30% of parents do not discuss debt or credit at home with their children. Nearly, 22% believes that their children are not interested in financial matters and 48% do not want to "appear like a nag".
Industry experts – including charitable organisations – have started urging people to be more open about debt problems. Derek Oakley, the insolvency director at Debt Free Direct, said that the only way to deal with financial ignorance is to talk and learn about the facts.
According to Martin Lewis, the creator of moneysavingexpert.com – “Sadly in the UK, money is often a taboo subject, which adds to the huge problem of financial illiteracy in the UK. It's time all parents and students started talking, considering their cash, understanding how the system actually works and discussing how to live within a budget… Do that and there is no one who should be put off entering higher education because of worries about student debt."
Expressing his concern on the issue of teenage debt – Bill Rammell, the minister for higher education, recently said that besides common societal topics, parents must discuss money matters too.
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