Understanding the UK's debt problem in 2024, and how DebtCo can help

In 2024, millions of people and companies in the UK still struggle with a debt crisis that is growing increasingly worse by the day. Recent statistics from The Money Charity show that the average British household has a problematic debt above £35,000 – a figure that shows how much pressure people are under financially. But it’s not just individuals who are affected. Businesses also have to deal with this problem when they try to get unpaid invoices paid, because such situations can seriously disrupt the cash flow and financial health of companies.

The UK's debt problem in numbers.

At present, consumer credit debt levels have reached their highest point ever recorded in mid-2024. With inflation rising due to higher living costs (including interest rates), many families find managing their finances difficult, as revealed through various figures:

• The average total debt per household, including mortgages, was £65,239.
• Per adult, this was £34,537, around 96.0% of average earnings. This is up from the revised £34,482 a month earlier.
• Credit card debt is an average of around £2,487 per household, reflecting dependence on borrowing money for daily essentials.
• On that note, a credit card on the average interest would take 26 years and 10 months to repay, making only the legal minimum repayments each month.
• Mortgage debt – one of the largest components within total personal liabilities – continues its upward march: monthly repayments rising over 30% YoY according to some measures.
• Insolvencies & bankruptcies continue upwards, too signalling trouble meeting obligations among more people than before.

These numbers illustrate the wider economic difficulties faced by Britain today. Businesses must realise the ramifications this has on operations, especially those related to recovering back payments for goods supplied or rendered, i.e., unpaid invoices.

How it affects businesses.

This situation poses a significant challenge for businesses, as they deal with clients who owe them money. Failure can severely damage cash flows to pay debts owed, which can make it impossible for firms to carry out daily activities, invest in expansion or even meet their own commitments. Moreover, if invoices remain outstanding for long enough, there is always a danger that they will become bad debts, further eroding profitability.

To survive during these tough times, enterprises need to take control of receivable management processes, ensuring quick collection of outstanding amounts from customers. This is where DebtCo comes in handy.

What DebtCo can do for you?

Knowing how sensitive and intricate debt collection can be, especially at times like these when the economy is struggling, we have adopted an ethical approach that considers both the rights of creditors and debtors. Here are some of our most important features:

Professionalism in Recovering Debts: We deploy tried-and-tested techniques plus tools necessary for fast and efficient recovery of debts, allowing clients to concentrate on their core activities.

Compliance with Legal Provisions: The legal framework for debt collection is complex. However, we guarantee that all our procedures comply fully with UK laws, thereby minimising any risk of legal challenges during the process.

Tailor-Made Approaches: Every business has unique requirements in recovering its funds. Therefore, we offer customised services designed specifically to meet individual needs, whether dealing with a few outstanding invoices or huge volumes of unrecovered debts.

Preservation of Business Relationships: We strive to promote healthy interaction between enterprises, while demanding payment from defaulters firmly but fairly.

Moving On

We all know that the debt crisis is a significant problem in the UK, which affects each of us – individuals and businesses alike. Companies need a stable ally in these trying times, such as DebtCo. If you use our knowledge of collecting debts, your business can stay financially fit even when debt levels rise.

To sum up, realisation of the present situation with indebtedness and active measures towards managing accounts receivable is vital for any enterprise this year, 2024. We can help you recover unpaid invoices quickly and keep cash flowing, so that you continue to grow your company despite challenges posed by the UK's debt problem.

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Get in touch with us today if you want to discuss how our digital collections service can help your business.

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Report from Money Statistics - https://themoneycharity.org.uk/money-statistics/