Winners and losers in pandemic debt stakes
Borrowers have managed to wipe an average of a third off what they owe on their nonmortgage debts over the past year, according to a credit checking company.
With fewer opportunities to spend during the pandemic, people's outstanding balances on credit cards and loans have shrunk by 32% or £3,764 typicallyduring the year, Ex per ian found.
Ex per ian Credit Expert customers had an average credit balance across all accounts, excluding mortgages, of £7,851 in March – down from £11,615 in March 2020.
The company say it is likely that the reduction was driven by fewer opportunities to spend on non-essential items and lower transport costs as a result of the restrictions.
It said another factor has been changes in credit availability, as lenders became more cautious.
James Jones, head of consumer affairs at Ex per ian said: "It's encouraging that borrowershave managed to reduce the balances on their credit cards and loans, with lockdown impacting day-to-day spending and saving habits.
"As a result, many have improved their credit score and financial position more generally."
"The supply of affordable credit has also improved significantly, so people now have more options if they' re looking to reduce interest rates on their existing debts."
Mr Jones added: "While some people have been able to improve their financial position,we know many have struggled, especially wherein comes have been hit.
"Our advice to people with money worries is to seek support and contact their lenders without delay.
"The sooner there' s a plan in place, the sooner you' ll be back in control of your finances."