Britons slow to pay off card debt

It will take the average person nearly two and a half years to pay off credit cards and other consumer debts, according to research by a mortgage broker.

The Mortgage Lender asked 2,000 people representative of the UK population how much debt they had in addition to their mortgages and how much they planned to repay in the next six months. The average amount owed was £3,485 and borrowers planned to repay £720, or 21 per cent of their debts, over six months. At that rate it would take two years and five months to repay this amount.

Men have nearly £1,000 more debt than women, at £3,740, but women plan to pay off more, proportionately, over the next six months.

Debtors in the North East are the keenest to repay their debts. Of the £2,820 they owe, they hope to use the next six months to clear a third.

Tim Kirby, managing director of The Mortgage Lender, said: 'It is concerning to see the extent of the debt people can find themselves in and, of this, how little they are able to pay back within the course of half a year.

'On the face of it, consumers can look at their arrears and estimate how soon they can pay it off. However, changes in interest rates can have a knock-on effect, and as debtors commit to regular payments, changes in financial circumstances may force them to extend their debt - therefore hiking up their monthly repayments while prolonging the date of their final repayments.'

The Bank of England recently announced that UK consumers borrowed nearly £10 billion in June, a record increase. Market research organisation Datamonitor found that the average consumer owes £1,062 on credit cards, £1,561 in loans and £760 in overdrafts, a total of £3,383.