By Claire West
Over 90% of Brits are aware of their own personal financial position and the level of debt they currently carry, according to research issued today by accounting software company, Accountz.
The survey, conducted prior to the recent announcement that 6 million of us now owe the taxman a staggering £2 billion in underpayments, found that up to that point 92.2% of the sample was fully aware of what they owed in various debts and liabilities including mortgages, credit card debt and overdrafts.
The research also found that the UK consumer is highly astute when it comes to money management. Just over one third (36.4%) of the sample knew the level of interest on their personal overdraft and a further 30.5% had no overdraft at all.
Key findings include:
- One third — or 33.1% - had no idea what interest rate was charged on their overdraft.
- 61.6% of the sample knew the exact amount of interest being applied to their savings account.
- Just under two thirds (65%) knew exactly how much tax they had paid last year, and 77% of the sample knew their own personal tax code.
Quentin Pain, Founder of Accountz, stated: “The Office of Budget Responsibility is predicting that household debt will stand at roughly £1,823bn by the end of 2015, which is a daily increase of £159m between now and then. This takes the average household debt to about £72,341.”
“Interestingly over the past 12 months this level of debt has only increased by 0.8% which is relatively flat year on year, indicating that us Brits are taking the issue of debt seriously and beginning to pay back the money we owe.”
The latest borrowing figures out in July from the building societies reported that consumers actually repaid £379m more than borrowings. Furthermore, with interest rates so low the societies also reported over £1.3bn in savings being withdrawn as people pay down debt as opposed to save.
“This high level of awareness over personal debt indicates that now more than ever us Brits are becoming more astute in money management. Increasingly people are using software applications such as Home Accountz to track, record and manage their money. After all increased measurement leads to improved money management,” added Quentin.
“The tragedy for many money-conscious people is that while they appear to be on top of personal debt, acutely aware of their personal liabilities, thinking they are in control of their income, along comes HMRC with a sting in its tail. There is no doubt that tax demands against income already taxed will hit people hard, no matter how careful they have been.”
“The lesson HMRC needs to take from this research is that the British are financially savvy and running tight household budgets as it is. It needs to act sympathetically and accept totally its own liability in this mess and work with taxpayers on repayment schedules to suit them and not the government,” concluded Quentin.