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Family debt increases in the past year

By Sarah Engle, Wed 25 Jan 2012 - Published in Loans

Families in the UK are struggling to keep on top of their finances as the level of household debt continued to rise in 2011.

Research by Aviva found that more parents were taking out loans in a bid to reduce the level of debt they had amassed. Whilst the typical monthly income rate rose by seven per cent to £2,066 (up from £1,937 in January 2011) many more people are failing to save enough money.

The study found that 62 per cent of UK families were worried about the rising cost of living with 42 per cent of households not saving anything during the past 12 months. Many are highlighting the rising rate of inflation which has impacted on consumer confidence.

Louise Colley, head of protection sales and marketing at Aviva, said: "Families in the UK are still very concerned by the rising cost of living and levels of unemployment."

Recent research by Gocompare.com found that more Brits were turning to credit cards as a way of combating rising debts with 26 per cent of people expected to owe money in the coming year.