New figures indicate that Britain's debt difficulties are being compounded by those underestimating their debts. According to research carried out by Mintel, consumers are underestimating the amount of money that they owe by billions of pounds. In a survey conducted by the market research firm, borrowers were asked how much they had left to pay on their unsecured loans. The average answer was ?5,251, however the Bank of England reports that the typical adult actually has some ?10,300 outstanding. Consequently, the company suggested that "worryingly" Britons are in twice as much debt than they are actually aware of. As a result, it was purported that 21 million people - a figure just under half of the adult population (43 per cent) - are more than ?100 billion in arrears beyond their estimation. However, only a fifth of those with unsecured debts currently claim to be worried about how much they owe.
In contrast, secured loan borrowers were said to have a more accurate idea about their finances. The Mintel survey of mortgage holders showed that respondents believe they have some ?92,200 outstanding. Meanwhile, figures from the Bank and various mortgage lenders state that the average amount owed is ?95,000. As a result, the study suggested that Britons have a "much better handle" on their property-based debts.
Commenting on the study, senior finance analyst Toby Clark said: "While Brits do seem to have a good grasp of their mortgage borrowing, they are wildly underestimating the amount of money they owe on credit cards and loans. Clearly, it is a lot easier to keep an eye on a single mortgage, than it is to juggle a couple of credit cards, a personal loan, a car loan and maybe even an overdraft as well." "There is a desperate requirement for financial education and for an initiative that prompts borrowers to re evaluate their debts. Without a detailed understanding of exactly how much they owe and what rates they are paying, it is easy to see how the situation could spiral out of control," Mr Clark added.
Research carried out by the firm indicates that those households on low incomes - those who earn less than ?15,499 a year - are borrowing to help meet the cost of day-to-day expenses. A reported 11 per cent of such consumers were said to use credit to meet regular demands for payment on areas such as phone bills. Meanwhile, 29 and 11 per cent of low earning adults are said to use money they have borrowed to help raise their children and pay taxes. However, these proportions fell to 21 and six per cent for Britons judged to be wealthy with an annual salary of ?50,000 or more.
The findings also revealed that well off families utilise credit to help supplement their assets. Just under two-thirds (63 per cent) borrow to help meet mortgage costs for their home, with 13 per cent using the money to fund the purchase of a second property. Also according to Mintel "paying for their children's further education accounts for 9 per cent (one in ten) of well off consumers' debts.
In figures released by PricewaterhouseCoopers earlier this month, borrowers of all types were reported to be paying back more money servicing debts. During the three-month period from April to June, households were said to be putting 19 pence of every pound they earned towards making credit payments - the highest proportion recorded since the third quarter of 1990. Head of macroeconomics John Hawksworth claimed that more consumers are facing pressure on their finances as a result of increasing energy and petrol bill costs combined with only "modest" rises in annual earnings. Because of this, he claims that consumer spending will fall over the coming years as day-to-day finances are impacted upon by 'debt obligations'.
Wouldn't it be great to find ways to avoid some of these tragedies? That thought first got my attention as a college senior. Shocking assassinations changed the American political scene in 1968 when first Dr. Martin Luther King, Jr. was shot and soon after Senator Robert F. Kennedy was also killed. Two great leaders were removed at a time when new trails to social justice and international peace needed to be blazed.
As upsetting as those killings were, I was almost as shocked when my university invited the Shah of Iran to speak at my college commencement exercises where he announced an international peace corps. Even in those days, the Shah was well known for stifling his political and religious opponents, even to the point of spying on dissident students enrolled in American universities. Rougher tactics were employed against opponents in Iran.
Fortunately, my class was also allowed to invite a speaker. We chose Ms. Coretta Scott King, Dr. King's widow, to address us on Class Day, the first woman ever invited to do so. This was one small step in her achieving more prominence in the non-violent search for civil rights.
Recently reviewing the events of 1968, I was struck by how often the "official" actions support injustice. As a result, it's good to think carefully about how far we should support "official" positions as opposed to looking independently for the truth and then acting on it.
My thoughts turned to those long ago days while considering the path towards social justice followed by Dr. Hossein Sheykholya, a former Iranian Air Force fighter pilot who later became a political prisoner in Iran. As a child, Dr. Sheykholya lived in a tough, violent working-class neighborhood in Iran. Around him were frequent reminders of the Shah's social and political repression. At the same time, poor people didn't get the medical attention they needed . . . despite the country's great wealth. Great prejudice existed against the poor; favoritism, corruption and crime were among other social ills.
Convinced that the "official" approach was wrong, Dr. Sheykholya became a social activist, a dangerous thing to do in Iran at that time. He also decided to use social science to find the causes of oppression, poverty, prejudice, drug addiction, and other ills. This determination went against the grain of what many believed at the time: these social ills were predetermined by biology or mental illness.
In examining these problems, Dr. Sheykholya learned something else: Prestigious universities often encouraged thinking about these problems that came no closer to finding causes for these afflictions than did believing in the prejudices of the uneducated. As an example, he reminded me of Professor Jeffrey D. Sachs, long considered to be one of the world's leading authorities on how to help poor nations to improve their circumstances through economic policies.
Professor Sachs noted the following reservations about his past advice around the world: "It has taken me 20 years to understand what good development economics should be, and I am still learning." Clearly, earning a doctorate alone wasn't enough to equip Dr. Sachs with the best solutions; only getting his hands dirty in country after country provided his real education.
When the time came to earn his own doctorate, Dr. Sheykholya wanted to avoid the pitfall of studying under those who only knew the "official" answers to problems of social justice. Instead, he looked for a university that emphasized building new knowledge through independent study.
He found what he was looking for at Rushmore University (an online school) where all courses are conducted as individual tutorials in which students work one-on-one with a world-class faculty of experienced practitioners and scholars. Students are also permitted to design their own courses, majors, and degrees. Such flexibility provides the opportunity to gain new knowledge from wherever it is needed.
Dr. Sheykholya did exciting work at Rushmore and earned his doctorate from that university, based on much field study of the causes and cures for the social ills he first observed in Iran as a youngster. He now uses his new knowledge to help provide those cures in a country outside of his native homeland.
When asked why he didn't return to Iran, Dr. Sheykholya observed that the country still suffers from oppression and injustice . . . but from a different "official" source. He observed, "I decided for self exile again. I shall struggle for a free society and an advanced country that will promote freedom, democracy, and social justice in its society."
Education has value to society as well as to the individual. But no educational method can hope to instill a strong desire to do the right thing in seeking and applying important new knowledge: Universities can only hope to encourage independence of thinking and action that lead to making better decisions.
Has your education equipped you to seek out the truth in new ways and to advance the application of that truth to avoid tragedies?
If not, perhaps you should seek out new forms of learning that better prepare you to challenge the "official" views.
Both Abbi Rouse & Donald Mitchell are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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