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February 20th was Debt Freedom Day

By Sarah Engle, Mon 22 Feb 2010 - Published in Loans

Brits spend the first 50 days of the year paying off the interest on their debts, new research has claimed.

Figures from advice website Unbiased.co.uk suggested that the average person in the country has to work until February 20th to earn enough money to cover their interest payments.

In addition, the organisation's Debt Freedom Day report showed that personal loans in the UK remain at the levels seen a year ago, although credit card debt has increased by more than £4 billion in the last 12 months.

Karen Barrett, chief executive of Unbiased.co.uk, commented: "It may come as a shock that Debt Freedom Day actually only marks the day when we have paid of the interest on our debts, rather than the actual debt itself."

She also recommended that people seek independent financial advice to discover how they can take advantage of historically low interest rates to reduce their debts.

Recent research from Moneyfacts.co.uk discovered that interest on credit cards is currently at a 12-year high, with the average standing at 18.8 per cent.