It's time to talk about debt

  • Leigh Dunkley, Financial Wellbeing Lead
  • 25 January 2024
  • 2 mins reading time

The word ‘debt’ often comes with negative connotations and having debt can lead people to feel anxious, overwhelmed and under pressure.

According to The Money Charity, at the end of 2023, across the UK:

  • The average total debt per household is £65,724

  • The average credit card debt per household is £2,409

  • On average, each household spends £4.17 per day on water, electricity and gas

  • It costs an average of £24.44 per day for a couple to raise a child from birth to the age of 18

Given increased living costs and higher interest rates on borrowings, it isn’t surprising that many people are concerned about their finances.

64% of respondents to our Money and Mind survey are concerned or very concerned about their finances, yet less than half (46%) of these people would ever talk to their partner about their financial concerns.

Schroders Personal Wealth, Money and Mind Report 2023

However debt can be split into two types:

  • ‘Good’ debt is defined as money owed for things that can help build wealth or increase income over time, such as student loans, mortgages or a business loan.

  • ‘Bad’ debt refers to things such as credit cards or other consumer debt that do little to improve your financial outcome.

Having ‘bad’ debt isn’t always something you need to worry about, as long as you make repayments on time and manage the debt appropriately. And having ‘good’ debt doesn’t mean you’re free from financial pressures, as anyone who’s seen their mortgage rates go up can vouch for.

MoneyHelper, provided by the Money and Pensions Service, offers free financial guidance. Their website contains some useful information, tools and calculators that may help you to better understand your financial circumstances and plan for the future:

87% of survey respondents who are concerned about their finances say their mental wellbeing is impacted by their financial situation.

Schroders Personal Wealth, Money and Mind Report, 2023

Some debts can have an impact on your credit score. Building a good credit score is important because it can affect your ability to borrow money or access products such as credit cards or loans. You can check your score for free and, if it isn’t in the best shape, there are things you can do to aim to improve it: How to improve your credit score.

If you are worried about debt, some organisations may be able to provide support and guidance, such as the StepChange Debt Charity. But you may want to speak to your bank or lender in the first instance.

Only 36% of survey respondents said it is a top priority to sort out their finances.

Schroders Personal Wealth, Money and Mind Report, 2023


Schroders Personal Wealth, Money and Mind Report, 2023

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