In the United Kingdom, IOUs are a major problem. In order to understand how bad they are for society, we must first define what an IOU is. An IOU stands for “I owe you.”
They are promises made by one person to another in which the promisee does not expect anything in return from that person or entity. Nowadays, many retailers and businesses will give their customers an IOU at the end of a transaction before they leave because it is seen as a courteous gesture instead of cashiering out change immediately.
This practice has been going on for years, and stores have found ways to avoid potential legal problems with these types of transactions by requiring consumers to sign off on them.
IOUs By the Numbers
Thirty-two percent of British people, individuals, and businesses alike owe money to at least one other person or entity.
This has led to a substantial rise in the amount of IOUs being written around the United Kingdom, equating to roughly 17 billion pounds worth of debt.
IOUs Impacts on Brits
The negative impact these IOUs have had on society is exemplified by how much it costs British people every year just from writing them off as uncollectable amounts.
It was estimated that nearly 26 million pounds were paid out just last year alone for such debts. What’s even more shocking than this statistic is that there are people who sit idly by and watch their credit scores drop because they don’t pay back what they should’ve owed in the first place.
This affects the people who are writing off said debts and those who have to suffer from it on a day-to-day basis in the form of inflated prices to cover all these bad debts.
Introducing Equity Release
There may be a solution, though. Equity Release is a way for people to access their home equity without moving or selling their property. It’s a great way to clear any outstanding debt you have, and, at the same time, your heirs will still be able to inherit from what is rightfully theirs as well.
Equity Release does not require any monthly payments, so you can use it to pay off debts of any kind. It is also beneficial because the interest earned on your home equity will go towards paying for said debt instead of just throwing it away, which would lead to more money being paid back overall.