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Study finds people’s ‘tipping point’ into denial of debt

08 September 2015

Study finds people’s ‘tipping point’ into denial of debt

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New research has found the ‘tipping point’ amount of debt where the majority of people go into denial about their finances.

The study from PayPlan, a provider of free debt advice, revealed that £20,000 is the point where most debtors start denying the seriousness of their situation. The ‘tipping point’ figure does not take into account mortgage or property-related finance, and instead cites credit cards, personal loan repayments and bank or overdraft charges as the key reasons for getting into financial difficulty.

One in six people who owe more than £20,000 are still considering it low or insignificant, the research shows. PayPlan have calculated that the average amount of debt their customers are in is £21,670.

Jane Clack, a money adviser at PayPlan, was once in serious debt herself and knows first-hand just how much of a struggle it can be.

“We live in a society of debt denial. Rather than throwing overdue letters away we put them to one side, under the microwave to collect dust. These results show that the point where many people think ‘Oh well, I’m in this deep, what difference will another credit card make?’ is actually dangerously high,” she says.

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