Could selling an endowment be a way out of debt?

An increasing number of Britons are hiding the true extent of their debt problems from their partners through embarrassment, it has been revealed.

Research by Sainsbury's Finance showed that almost a fifth of consumers who are in a relationship and in debt have failed to divulge the full financial picture to their spouses.

Such findings mean that some 1.75 million people are hiding their debt from their other halves, while 1.92 million secret shoppers admit they conceal big purchases from their partner.

However, Chris Radford, chief executive officer (CEO) of aap - the UK's biggest buyer of endowment policies - said some of its customers had sold their unwanted endowments in order to meet their debt management needs.

Many Britons are currently choosing a different path. The poll discovered that eight per cent of adults frequently miss deadlines for bills, while seven per cent delay opening or ignore post that looks like demands for payment.

Furthermore, seven per cent of people admit they ignore or delay opening bank statements.

"The current economic climate is only exacerbating many people's personal financial concerns and our research highlights that there is a huge temptation to stick your head in the sand and hope it all goes away," stated Karen Horsburgh, head of Sainsbury's Money Matters.

"However, if you have money worries the best course of action is to tackle any financial concerns head on and seek advice on how to start rectifying the situation," she advised.

Indeed, 3.88 million individuals describe their own financial situation as "awful" or "pretty bad". Recent figures from the Insolvency Service showed that insolvencies rose by 27.4 per cent in the second quarter of 2009, compared to last year.

Rather than taking out personal loans and credit cards to pay off debt and hiding the true extent of their financial difficulties, some Britons may want to ensure the route they take does not push them further into the red.

After speaking to their partners about their monetary worries, homeowners may decide that clearing debt with a sum of cash is a better option than using credit as a crutch.

Chris Radford, CEO of aap said if the firm decides to make an offer to buy an underperforming endowment policy, it will always pay more than the surrender value offered by the insurance company.

Such a sum of cash could be put towards clearing debt, rather than using loans and credit cards to meet outstanding balances.


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