March 25th: The UK pays its debts for 2009

Wednesday 25th March 2009

Today marks the day when Brits stop servicing their debts are start working for themselves and not their bank.

Dubbed 'Debt Freedom Day' by the unbiased.co.uk, March 25th represents the day when wage packets stop covering interest payments on loans – 83 days into the year.

With a debt mountain of over £11.4 billion, the equivalent of the first 83 days of the year were spent earning cash to pay debts.

In 2006, Debt Freedom Day fell on February 6th, showing how much Britain has binged on debts in recent years – so that lower interest rates are falling to reduce the nation's massive interest payments.

However, Brits are still not home and dry when it comes to their debts – as there is still the taxman to pay.

Lat year, it took 153 days of the year for people to stop working for the chancellor.

That leaves 123 days - or one-third of the year – working to earn money for yourself.

But then there also remains paying off the capital on debts and mortgages, not just the interest.

David Elms, chief executive of Unbiased.co.uk, explained Debt Freedom Day has been falling later and later, but with the recession and jobless numbers set to rise over three million, people need to focus on their finances.

"It takes a date like Debt Freedom Day to bring home just how long we are spending as a nation on debt and it will hopefully spur people into action to do something about their debts," he said.

"Tackling your debt can be a daunting task, but you don’t have to do it on your own."

He advised people to first look at setting a budget and then seeking out independent financial advice to ensure their money is working as hard as it can and any debt is being repaid as quickly as possible while interest rates are so very low.

"The first stop has to be budgeting," Mr Elms said.

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