The amount of debt in the UK that is occurring in the middle and upper middle classes has risen since the beginning of the financial crisis. Reports from debt advice charities from different counties in the UK indicated that they have received more than twice the amount of inquiries this year from supposedly financially fit people.

These middle class debtors are bearing the brunt of the housing crisis and the figures are continuing to increase. Most of these debtors are bringing home five figure salaries. Among those sited included an IT manager on a salary of £28,500 that has an unsecured debts amounting to £28,500. A different case from Sussex has debts amounting to £110,000 from various loans and credit cards, far in excess of his £40,000 annual income which will not be sufficient enough to cover the debt.

With the domino effect brought about by the credit crunch, redundancy is also a major factor as to why people are finding themselves in deep debt. A large proportion of their funds has been spent on improving their homes based on the assumption of increasing house prices and therfore increeased equity which they assumed would compensate for everything. Most of the finances that were spent on home improvement also came from unsecured and secured loans. The result of all this, with the housing crisis causing a drop in house prices, a lot of these homeowners have stretched themselves too far leaving them with less equity than envisaged and with outstanding debts.

Banks and credit card issuers tend to look upon people with higher incomes as the ones who should easily be able to repay their debts. For that reason, they are the ones who easily obtain credit. However, debt does not discriminate by class, but since a lot of people in the middle classes have invested huge sums of their income in their homes, it is they that are feeling the pinch.


Borrowing money without giving enough thought to it has been the main cause of people’s debts and insolvency. Living an unsustainable lifestyle can be a financial ticking time bomb for anyone. The effects of the credit crunch and housing crisis have already taken its toll on a lot of people. Anybody who is planning to take out a big loan or mortgage should first think about his/her current condition and anyone who has just taken a mortgage or a loan within the past 15 months should re-evaluate their financial capability to avoid any potential issues.