‘Must-have’ smartphones add to rising debt situation

December 8, 2013

In January 2013, a report from the Office of National Statistics revealed Scots to have the second lowest level of personal debt in the UK, owing on average around £2,500 in credit cards, loans, store cards and overdrafts.

However, a recent report from the Money Advice Trust (MAT) reveals an increased number of people slipping into debt as a result of failure to pay their phone bills, with calls to the MAT rising dramatically in the last five years.

Since the launch of the iPhone in 2007, the number of calls regarding telephone debt has increased from 5,380 to 17,766 according to the MAT report and the trust expect to see a record number of calls for help recorded in 2013. With calls to the MAT specifically concerning phone bill debt increasing by 15% in the eight months to August this year, the trust anticipates record numbers by the end of this year.

Since the launch of the iPhone, several competitors such as HTC and Nokia have launched rival smartphone products in an attempt to cash in on the popularity of the iPhone.  According to figures from Ofcom, around 39% of UK adults now own a smartphone. As a must-have product for teenagers as well as adults, many parents feel under pressure to keep their children up to date with the latest technology, which for families with tight budgets, can be a massive strain on their finances.

Chief executive of the MAT, Joanna Elson, said: “A family of four with two parents and two teenagers could quite easily be paying around £140 a month for all four to have a smartphone – more than the average UK energy bill.”
If you’re concerned about the cost of your mobile contract or are falling behind on payments, make sure you discuss the situation with your network provider. If several members of your family own a smart phone, it could be cheaper to sign up to a special family plan to avoid paying separately for each individual contract.

Consider the importance of any special features such as free calls, text messages or internet data allowance and make sure you’re on the right plan. It could be that you’re either using too much, or not enough of your allowance and you may be able to save simply by switching to a more suitable contract.

If your situation has progressed to a point where you’re in considerable debt to your current mobile contract provider and you need specialist advice, contact our helpful team at Scotland Debt Solutions and we’ll give you expert advice on how to fix your finances.

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