Average household debt in the UK rose very slightly in the month of March, according to new figures from Credit Action.

The average household debt (including mortgages) stood at £53,995 in March – up from a revised £53,994 in February – revealing people are still struggling with their finances.

However, this does at least show the rate of growth for household debt is slowing down, as it has been increasing at a higher speed in previous months.

Borrowing also saw some stabilisation during the month, with the average amount rising from a revised £3,207 in February to £3,208 in March. People are clearly finding it hard to get out of their overdrafts and pay off credit card debt but the rate of borrowing is at least showing signs of improvement.

One alarming factor that the report found was the increase in plastic card purchases in February, with 31.7 million transactions made every day with a total value of £1.585 billion. In January, this figure was just 28 million transactions.

Based on the March figures, the UK's total interest repayments on personal debt over a 12-month period would have been £59.9 billion, which is equivalent to £164 million a day. This means UK households would have paid an average of £2,274 in annual interest repayments, which is lower than the figure provided last month – £2,299.

Outstanding personal debt stood at £1.423 trillion at the end of March, which is up from £1.409 trillion at the end of the same month last year. Unfortunately, people still owe nearly as much as the entire country produced during the whole of 2012.

Some 274 people are being declared insolvent or bankrupt every day, the equivalent to one person every five minutes 15 seconds.

As times get increasingly difficult, many people in the UK will turn to debt solutions to get themselves back on track. With a rise in the amount people owe, several individuals are taking up debt consolidation loans in order to manage their money more effectively.

By James Francis

People in the UK are becoming so lumbered by money worries they are concerned about their health, according to new research by MoneySupermarket.com.

The study – which surveyed 2,005 nationally representative UK adults – found 31 per cent of the population label their finances as the biggest daily stress. 

Some 18 per cent admitted their current financial situation is causing them the most stress and a further 13 per cent claimed it is their future financial situation which worries them the most. 

Worryingly, people are concerned about their health, with 13 per cent saying stress is making them feel anxious.

Unfortunately, of those who are already stressed about the state of their finances, a staggering 72 per cent believe their financial worries will only get worse this year, with the rising cost of living being the primary reason for 51 per cent of people. 

The cost of living has been rising at a faster rate than people's income, which is naturally causing problems and many have fallen into debt as a result.

Changes in the benefit system in the UK are also a worry for many, with one in ten saying the uncertainty towards their payments will increase their money worries.

In addition, almost half of people (48 per cent) claim they are either frequently or occasionally worried about their financial situation, which is not helping their health concerns. 

The younger generation are the ones feeling the financial strain the most, with two-thirds (62 per cent) of 18 to 34 year olds claiming they are frequently or occasionally worried about their financial future.

Clare Francis, editor-in-chief at MoneySupermarket.com, said: "With such a high percentage of those who feel stressed by their finances not being able to envisage any relief in the next year, and with it clearly impacting other areas of their lives, it is vital that people start to take positive action before it all becomes too much to cope with."

By Joe White

A fifth of people in the UK are hiding money from their partners, according to a new study by All About Money.

The research suggests people are actively misleading their partners regarding how much they earn or have saved in a bank account.
More than 5.5 million people do not actually know how much their partner earns and an estimated six million say that their partner does not know how much they are paid.

According to the study, around two million people have actively lied to their partners about how much income they bring in with a million telling them they earn more than they actually do and the another million saying they earn less.

One in five partners – around eight million people – have savings they keep secret from their other half. Women seem to be more likely to hide money from their partners than men with some 22 per cent admitting to having money put away to one side, compared with 20 per cent of men. 

Although women are more likely to be hiding a secret stash from their partners, men have over £3,000 more (£8,554.53) hidden on average than women do (£5,391.41). Overall, the average amount hidden away is £6,805.51, although 18 per cent of people with a secret money stash are hiding over £10,000.

Ian Williams from All About Money said: "For most people, relationships are built on trust and openness – and our research shows that this honesty usually extends to our finances too.  

"However, there is a minority that don't take that approach.  Some people are misleading their partners about how much they earn, or stashing some cash away 'just in case'."

Knowing the amount of money your partner earns can help household finance management significantly. By having knowledge of the exact amount of money coming in, outgoings can be planned for more effectively and money can be put aside for savings and debt repayments.

By Amy White

Households in the UK have now been stretched to full capacity and would struggle to cope with any more increase in their monthly outgoings, according to new research by Halifax.

Low wage inflation coupled with a rise in the costs of daily necessities and goods such as food and energy bills have caused people to reach breaking point with their finances.

Almost half of adults who took part in the survey (46 per cent) admitted they would find it difficult to cope if their monthly outgoings increased by up to £99.

The generations that are being stretched the most are those in their 40s (51 per cent) and 50s (53 per cent), with 18 per cent of both these age groups now so close to breaking point they would find it hard to take an increase in expenditure of just £24 a month.

This particular group of people have seen an above average increase in spending on essential expenditure. On average 26 per cent of households reported higher spending on fuel and energy bills over the last 12 months and this rises to 29 per cent for those in their 40s and 50s.

Additionally, nine per cent of households reported higher mortgage or rental payments, but this rose to 11 per cent for those in their 40s. Some eight per cent of households also reported an increase in food costs and it was nice per cent  for those in their 40s.

Unfortunately, people are not optimistic about their financial future with 40 per cent of households expecting their general financial situation to worsen in the next year, with pessimism at its highest among those in their 50s (56 per cent).

Director of personal current accounts at Halifax Anthony Warrington said: "There is no quick way to ease the squeeze on households and many are already cutting back where they can. With so many households at full stretch it's even more important to make strict budgets and keep on top of finances and outgoings."

By James Francis

Almost half of pre-retirees in the UK (46 per cent) admit they currently do not save anything for retirement, according to research from JP Morgan Asset Management.

This is despite 60 per cent expecting to rely on a state or workplace pension for income.

Nearly half of individuals (47 per cent) said they will use state benefits as their expected and primary source of income in retirement. This figure was just 29 per cent in 2006 revealing just how much people are struggling in the current economic climate.

Around a third of people (32 per cent) said they will be forced to work part time to make up the difference as the state pension will not be enough to make ends meet.

Only one in five (20 per cent) expect to rely on investments as a source of retirement, down from 41 per cent in 2006.

With the cost of living rising, many people are finding it difficult to find money to make savings for the future, especially when income is not increasing to the same degree.

Some people will take more drastic measures in order to fund their retirement, with 16 per cent saying they would move into a smaller property.

A further 16 per cent revealed they would rely on inheritance, while five per cent of respondents said equity release will be a considered solution.

The research looked into what people would do should they receive a £15,000 windfall. Participants are divided into savers and spenders, with almost half (43 per cent) saying they would save the money, a fifth (21 per cent) would invest it and 16 per cent would pay off a lump sum from their mortgage. 

However, others said they would rather spend it than save it, with 22 per cent admitting they would spend the money on a holiday.

Some 18 per cent would make home improvements and one in ten (11 per cent) would put it towards a new car. 

Interestingly, the number of people who would invest or save a £15,000 windfall has fallen since 2008. More than two-thirds (68 per cent) of individuals would have saved the money  in 2008, but this figure is now less than half (43 per cent) in 2012. In 2008, over a third (36 per cent) said they would have invested it, compared with just 21 per cent in 2012.

With people having little money for luxuries, it is perhaps not a complete surprise many would spend the money, however, it is important to plan for the future as a state pension may not be enough to fund retirement.

Keith Evins, head of UK funds marketing at JP Morgan Asset Management, said "An unexpected windfall would be a simple solution for many, but wishful thinking isn't going to make up the shortfall for people who are not currently saving for retirement. I'd urge people to think more long-term and start making provision for their financial future.

"The short-term gratification of booking a holiday is a great feeling, of course, but spending more precious time thinking about longer-term concerns – like investments – will pay dividends in the future."

By Amy White

Find out more about money management on the ClearDebt blog.