Living in debt? Savings expert shares secret to ‘spring clean your finances’
“Nobody thinks that a credit card is actually debt,” warns Kevin Mountford, co-founder of savings platform, Raisin UK.
READ MORE : http://www.euronews.com/2025/04/21/living-in-debt-savings-expert-shares-secret-to-spring-clean-your-finances
Subscribe to our channel. Euronews is available on Dailymotion in 12 languages
“Nobody thinks that a credit card is actually debt,” warns Kevin Mountford, co-founder of savings platform, Raisin UK.
READ MORE : http://www.euronews.com/2025/04/21/living-in-debt-savings-expert-shares-secret-to-spring-clean-your-finances
Subscribe to our channel. Euronews is available on Dailymotion in 12 languages
Category
🗞
NewsTranscript
00:00Sprinkling your finances is just as important as sprinkling in the house.
00:03The issue is when it spirals out control.
00:06Nobody thinks that a credit card is actually debt.
00:14Welcome to The Big Question, the series from Euronews addressing some of the biggest topics in the world of business.
00:20Today I am joined by Kevin Mountford, co-founder of saving platform Raising UK, to discuss all things debt.
00:26Thank you so much for joining me today, Kevin.
00:27So I think a lot of people feel a lot of shame about discussing debt, but it's actually incredibly common.
00:32How many people in Europe are living in debt right now?
00:34If you look at Europe as a collective, there's around $7 trillion of debt or of borrowings.
00:41And I think that's a big difference because we're all used to borrowing money for different reasons.
00:46I think the issue is when it spirals out control.
00:49But if I break that down to an individual level, that's around $10,000 per person.
00:54If we look at the amount of borrowing to income, then that's where it can become a bit of a challenge.
01:00So across Europe it's about 97%, but you've got some countries like the Netherlands, Norway, 200% plus.
01:08Yes, the income is higher in some of these jurisdictions, but the borrowing, relatively speaking, is higher as well.
01:14So the issue is not borrowing in itself, but that borrowing going out of control and debt that we no longer can manage.
01:21Thinking about the most common reason that people are borrowing and getting into debt aside from mortgages, what is the kind of most common cause of debt?
01:36I think credit cards generally, you speak to your friends and nobody thinks that a credit card is actually debt.
01:43It's just the way we live our lives.
01:44We all look at our bank statements and realise with contactless, you know, how much we've spent that we haven't really thought about.
01:52And to boost the economy, as governments are now looking at increasing the thresholds on contactless.
01:58So in the UK it's generally £100, but if that starts to increase, I think we need to be far more disciplined in managing our household budget.
02:07I don't know about yourself, but through the years as my salary's gone up, I've not really been any better off.
02:12The more I earn, the more I spend. When that gets out of control, that's when you've got a real problem.
02:17And do you think there's a kind of financial literacy problem and a lack of education in schools that's kind of partly to blame?
02:22So we carried out some research at Raisin and it showed that there was a lack of understanding over things like what's inflation, what's standard variable rate on a mortgage, what's AER, APR, etc.
02:33The problem is if you've not got that awareness, you don't feel empowered and in control to make the best use of your finances.
02:41So that plays into the hands of the banks and other financial institutions and we become very apathetic and we don't change products as readily as we should.
02:52So that in itself, you know, creates a problem.
02:55Yeah. And do you think social media plays a role in contributing to debt in younger generations?
03:00Social media can be a cause for good in so much that you can find information, but there's promotional adverts in front of you day in and day out.
03:09And I think that the problem being it creates more immediacy on the back of your aspiration.
03:15And don't forget the ease of which you can buy things online now.
03:19I've got friends that struggle to sleep. So what do they do in the middle of the night?
03:22They go online and they start buying stuff. So that's where the likes of social media and the kind of immediacy of new technology can create problems.
03:32So we just have to be careful.
03:34What are the long term ramifications of getting into debt at a young age?
03:37Worst extreme is you can face bankruptcy, get assets seized, but also your credit scores.
03:42When you're older in particular, you might want a mortgage or you might want a car loan, etc.
03:46That's going to go against you. So the worse your credit score is, then you fall into kind of subprime categorisation.
03:53The interest levels you get, people are prepared to give you money, but you'll have to pay more for it.
03:58So it becomes a downward spiral, really.
04:00So for those already in debt, what are the key steps to take to get out of debt?
04:04Accept the fact that you're in debt.
04:06What you don't want to do is compound the problem by allowing the debt to get out of control.
04:11So talk to somebody. Don't bury your head in the sand.
04:13If you've got a loan provider, it's your mortgage, unsecured loan, wherever it might be, talk to them.
04:18There might be ways of rescheduling your finance to ease the burden a little bit.
04:24There are ways you consolidate loans.
04:26So what happens is you pay the loan back over a longer period, but your outgoings are reduced.
04:31So there's different ways of tackling this.
04:33There's certainly people out there that would try to take advantage of your situation.
04:38So if you need any debt-related advice, there are charities out there.
04:42There's a way of getting free advice as opposed to paying for it,
04:45because you don't want to be paying for something when you're struggling with finance to start with.
04:49For people who maybe do manage to pay off debt, what do they need to do going forward to stay out of debt?
04:54I think it really is about budgeting.
04:57Sprinkling your finances is just as important as sprinkling in the house or whatever.
05:01I've just changed car insurance.
05:03I've saved £130.
05:05I've just changed broadband provider.
05:07I've saved £500 a year, or whatever the case may be.
05:11It's money in my pocket as opposed to the bank or the insurance provider or whoever it may be.
05:16I think quite an interesting thing is maybe as a family or as a group of friends,
05:20why don't every quarter or six months sit down over a bottle of cheap wine because you don't want to overspend?
05:26But why don't you just have a look at your outgoings?
05:28Have a bit of a competition trying to reduce it.
05:31What are the next steps to create a kind of positive financial situation going forward?
05:34I think awareness, education, real understanding the terminology, getting to a point where you feel empowered.
05:41So, you know, raising as a savings platform, taking the UK as an example, there are hundreds of millions of pounds sitting in accounts paying 1% or less.
05:52From our platform, you could get three, four times that.
05:55That's money in your pocket and not in the bank's pocket.
05:58So just do something about it.
06:00You've got deposit guarantee schemes across Europe that's protecting your savings up to certain limits.
06:06So there might be a brand that you don't recognise and you stick with a high street bank because you think your money's safer.
06:12Well, in some respects, that might be the case.
06:14But with under the deposit guarantee scheme, whether it be €100,000, whether it be €85,000, your money's protected.
06:22So go with the regulated entity that you might not know, but you'll get a better return on your savings.
06:27Looking across Europe in the future, what is the economic outlook and how is that going to affect us?
06:32I think it's a challenge and it's a challenge because if we look at it globally at macro level, we've still got conflicts around the globe.
06:38You've then got the ramifications of the Trump regime and that we possibly could have a trade war with tariffs and retaliation from countries that are affected.
06:48So from a central kind of banking perspective, one of the tools they've got is interest rates.
06:53So we saw that inflation was double digits, so they put up interest rates, means there's less money available, so we spend less because of supply and demand.
07:02Inflation is coming under control, but there are potential issues because of this trade war situation.
07:07And I think the European Central Bank will, as we get into the summer, reduce rates.
07:12There is a view that it will get down to 1.75%.
07:14It was over 3% back in the last year.
07:17So if you bring inflation down, that kind of cost of living crisis reduces, interest rates come down, then anybody who's got borrowing linked to interest rates will end up having lower payments.
07:27So all of these are positive steps.
07:29So for a lot of people that are facing debt challenges, that will be a consequence of high interest rates and high inflation.
07:35As they ease, some of those debt levels will naturally reduce.
07:39So let's hope that when we get into the summer, that that eases the debt burden on households across Europe and beyond.
07:46Thank you so much for your insights today.
07:48And thank you very much for joining me on The Big Question.
07:49Thanks for having me.
07:50We'll see you next time.