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Britons 'Told Off' For Late Repayments

Aug 18, 2007
The majority of Britons have received a 'red reminder', new figures reveal. According to research conducted by Lloyds TSB, two-thirds of consumers (66 per cent) have had a final warning demanding payments for secured personal loans, utility bills and credit cards.

Findings by the financial services firm also indicated that 45 per cent of Britons are issued with such reminders "occasionally", compared to 15 per cent of the population who have only received the demand once. Meanwhile, six per cent of adults were reported to get such correspondence "frequently", which consequently could indicate a difficulty in managing debts and paying off home loans.

Head of internet for Lloyds TSB Anita Hockin said: "Nobody likes receiving a red reminder, it gives you the feeling you're being told off."

"The huge number of people who admit to having received red reminders proves that sometimes it's a struggle to keep on top of paper bills," Ms Hockin added.

Results from the study also indicated that half of those surveyed believed that more widespread use of email reminders could encourage more consumers to pay their bills on time. More than half (55 per cent) of consumers were reported to pay their bill as soon as they receive their reminder comes through their letterbox.

However, the research also indicated just over a quarter (27 per cent) of respondents wait for up to seven day before making such a payment. Meanwhile, 13 per cent were said to leave paying for a month, which could consequently increase debt problems and difficulties in making secured loan repayments.

Forgetting about the bill entirely was reported to be the main reason for receiving a red reminder accounting for some 63 per cent of respondents, with 22 per cent claiming to have been away on holiday when a bill was sent to their home.

As a result of receiving a final warning, about a quarter of those surveyed claimed to have consequently felt anxious, with 21 per cent reported to be 'stressed out'.

In related news, research carried out by MoneyExpert earlier this month has indicated that about 1,389,000 repayments on personal loans have so far been missed over the course of this year.

With an average of 7,700 payments failed every day, some three per cent of all loan consumers were reported to have missed paying back on their borrowing over the last six months - a rise of two per cent from a similar study in 2006.

However, chief executive Sean Gardner warned: "Burying your head in the sand is not the way to deal with financial problems."

"The concern has to be that people are missing repayments on unsecured loans because they believe there's not as much at stake as missing a mortgage repayment," he added.

Mr Gardner also suggested that the MoneyExpert figures reveal that consumers are currently under "real financial distress". He claimed that if the Bank of England were to raise interest rates within the near future that Britons could be set to struggle with their finances even more.

Meanwhile, those who were reported to consistently fail to make payments on loans and bills could be at risk of damaging their credit rating or going to court.
About the Author
Abbi Rouse writes for Loan-Arrangers .co.uk where visitors can compare loans online. Then apply for the best rate secured loans and bad credit loans available.
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