talking about debt
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Our finances are a topic that we veer away from in conversations with friends and family. This is particularly true when it comes to talking about debt – a subject still very much considered a taboo

The reality, however, is that debt is extremely common. recently commissioned an independent survey among more than 2,000 UK adults and found that 62% of the respondents were in debt – credit cards (35%), mortgages (24%) and student loans (11%) being the most common forms.

The scale of an individual’s debt can be difficult to see, particularly as many people are hesitant to admit to money worries. In fact, our research revealed that over two-fifths (41%) of people in debt would not want to discuss the subject with those close to them.

Whether the hesitancy stems from shame or embarrassment, discussing debt more openly can shed some light on the bad practices that are employed when it comes to managing money. As a result, it can start important conversations about effective ways to handle any future or outstanding debt.

Different types of debt

Perhaps the most crucial thing to keep in mind is that there are different types of debt. On the one hand, ‘good’ debt can be paid off in a manageable way and will provide long-term value. This debt can support important life purchases like a property or a car.

Bad debt, meanwhile, is debt which cannot realistically be repaid in a reasonable timeframe, or that which will not offer any significant long-term benefits. A common indication of bad debt is that making repayments will eat into other important financial outgoings like rent payments or utility bills.

Understanding the difference between the two and only taking on good debt is vital to keeping on top of one’s personal finances.’s research revealed that 33% of people admit to buying items using debt without first considering if they can afford the repayments – offering an important insight into why so many people are taking on bad debts.

What is your debt-to-income ratio?

For those keen to adopt a responsible approach to their personal finances and in a position to take positive action, there are a number of useful tools available that can help them better understand their own situation.

A debt-to-income (DTI) ratio, for instance, offers an indication of how much debt a person has in relation to their earnings. This is calculated by dividing total recurring monthly debt by gross monthly income.

Yet despite being a useful indicator, many people don’t know what their DTI ratio is; in fact, 44% of UK adults who are in debt are unaware of their own ratio. Luckily, there are a number of online debt-to-income calculators that simplify the task and instantly provide an insight into a person’s finances.

The link between debt and mental health

Importantly, debt isn’t just an issue of personal finance. Yes, there are significant financial repercussions but it can also contribute to long-term mental health problems such as stress, anxiety and depression. At the same time, it places a huge strain on relationships and families.

It should come as no surprise then, that almost a quarter (24%) of the people surveyed admitted they are losing sleep because of debt worries. Unfortunately, money worries and symptoms like stress often feed off each other, creating a vicious cycle that can be difficult to get under control.

So, while it’s important to learn how to effectively manage your debt for the sake of staying on top of your finances, it’s also incredibly important to do so for your own mental wellbeing.

How the government can help

There is an important role for government to play in supporting those struggling. After all, there are evidently wider social effects of debt, not least of which are the mental health implications.

The government can help by providing information to individuals on understanding the possible next stages of unmanageable debt, but probably of more value, they can provide information to free debt advice services and charities. After all, there are evidently wider social effects of debt, not least of which are the mental health implications.

Moving from the public sector to the third sector, charities like StepChange are already offering free and impartial advice to help people get their debt under control; in the first six months of 2018 alone, more than 325,000 people contacted StepChange for help with their financial concerns. These efforts should be replicated and amplified by the government to offer more comprehensive support and ensure people don’t suffer in silence.

After all, removing the taboo surrounding debt is something society as a whole must strive towards. Having frank and honest discussions about debt can encourage better financial practices and ultimately prevent many individuals from becoming trapped with bad, unmanageable debt.


John Ellmore



Call 116 123 to speak to a Samaritan


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