Scale of people’s ‘hidden debts’ revealed
Households are potentially sitting on a £96 billion hidden debt mountain, with more than two-fifths of people owing sums which they have kept secret from their family, partner or friends, a government-backed body has found.
The Money Advice Service (MAS), which released the findings to mark Talk Money Week, said the average hidden debt across the UK amounts to £4,164 per person.
It calculated that if the figures are projected across the UK adult population, the total hidden debt amount could be as high as £96 billion.
Some (44%) of those surveyed report hiding debt from their family, partner or friends.
Talk Money Week, which runs until November 18, aims to improve people’s money management skills and financial well-being.
Nearly a third (29%) of people with debts who are in a relationship said their partner does not know about all the money they owe. And 5% admit their partner is completely in the dark about their debts.
Women are more likely to talk to their friends about debts than men, the research suggests.
Half (50%) of men with debts admit that their close friends do not know anything about it, compared with 43% of women, according to the MAS, a body set up by Government to offer money tips.
Credit cards were found to be the most likely source of hidden debt, with personal loans, overdrafts, informal loans from loved ones and store cards also common sources of hidden debt.
Some people also said they have payday loan debt hidden, although this was less common than the other hidden debt sources.
Common reasons why people keep their debts hidden include not wanting to burden others with their money problems; not wanting friends and family to worry, and not having the confidence to speak about finances.
Caroline Siarkiewicz, head of debt advice for the MAS, said: “Sometimes it can be easier to pretend everything is all right and avoid opening up about our debt problems to escape the tough conversations, not because we want to cause harm, but because we want to shelter those closest to us from our problems or are concerned about being judged.
“However, this rarely solves the issue. In fact, it often makes things worse.
“Debt can be a particularly difficult topic to broach, especially if you’ve fallen into a spiral and don’t know how to get out of it. But sharing a problem is the first step to solving it; it’s always better to be open with your loved ones when it comes to money.
“As it’s Talk Money Week, there is no better time to start opening up about your finances. Whether with friends and family or a partner, use this week to talk about your money worries. And remember that free and impartial debt advice is available near you.”
More than 4,000 people were surveyed.