5m heading into New Year more than £10k in red

ALMOST 5million Britons are heading into the New Year with more than £10,000 of debt, with some owing as much as £100,000.

A further 9million people owe between £2,000 and £10,000, according to a poll by comparison site Money.co.uk.

The figures – which exclude mortgages but focus on credit cards, personal loans, car loans and overdrafts – also suggest that almost two-thirds of the UK’s adults, or 63 per cent, will head into 2020 in some form of debt.

The 4.8million calculation was based on a poll of 2,018 Britons aged 16-64, which found that almost a fifth had personal debts topping £10,000.

Former work and pensions minister Baroness Altmann said: ‘This is really shocking. I very much hope that financial companies and regulators will start to take notice of this worrying increase in the level of household debt.’

London was the most indebted city going into the new decade where borrowers on average owed £19,656 each. In contrast, Scots appeared in better financial health as 45 per cent will enter the New Year debt-free.

A worrying 40 per cent of people polled said their debt was due to normal living expenses, while 21 per cent admitted that they had to take out a new loan to pay off older, smaller loans.

A fifth were going into the red to pay for holidays, while 18 per cent blamed Christmas and another 18 per cent said they had secured loans to buy luxury items.

More than one in ten said they were still paying off loans taken out to cover last Christmas.

Salman Haqqi, a personal finance expert at Money.co.uk, said: ‘One of the most concerning stats from the research is that 40 per cent of people are using debt to pay for household essentials, simply unable to afford the cost of living from their regular income.’

Credit card debt is the most prominent form, with 38 per cent of those polled owing money on plastic, while 19 per cent had a personal loan and another 19 per cent had a bank overdraft. Large numbers of borrowers had also arranged car and payday loans.

Baroness Altmann has urged employers to do more to help their workers manage debt levels. She is advocating increased education in the workplace, and for companies to offer services such as salary deductions to help employees pay off loans.

On average, men owed around £300 more than women at £3,138, according to the survey.

Meanwhile, borrowers between 35 and 44 owed £4,076, while 16 to 24-year-olds owed £1,784.

The figures come on top of research from digital bank Bo this year, which analysed the accounts of 750,000 customers at its sister bank NatWest. It found around half of customers spent every penny they earn each month.