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ADVERTISEMENTEuropean Union household debt hit $6.96 trillion (€6.2tn) in January 2025, according to CEIC and the European Central Bank. Whilst mortgage borrowings account for over €5.23tn, the remaining roughly €1tn could be cause for concern.
The average debt to income ratio across the bloc has gradually been decreasing over the past few years, meaning citizens are borrowing a smaller proportion of their income.
The European average is currently around 97% but some seemingly wealthy areas like Scandinavia and the Netherlands have much higher borrowing ratios, sometimes over 200%.
This goes to show: debt isn’t just a burden on the poor. This was also demonstrated by the 2007 financial crash when people who had bought luxury goods on finance schemes, such as cars and watches, were suddenly incapable of repaying their loans.
But in 2025, with rising costs of living, is it really possible for people to get out of debt?
“The issue is not borrowing in itself, but [the risk of] that borrowing going out of control and debt that we no longer can manage,” Kevin Mountford, co-founder of savings platform, Raisin UK, told Euronews.
In this episode of The Big Question, Kevin joins Hannah Brown to discuss debt-busting techniques and tips to create a positive financial future.
What are the main causes of personal debt?
Credit cards, contactless payment and the ease of internet shopping are key factors causing people’s expenditure to run away from them, according to Kevin.
“I’m of an age where you would budget differently, you would draw cash out, you’d spend it and when it’s gone, it’s gone.”
“But now, we all look at our bank statements and realise with contactless, how much we’ve spent that we haven’t really thought about,” Kevin added.
In 2023, Netherlands, Denmark, the UK, Finland and Sweden all ranked in the top 10 of global countries with the highest credit card debt.
He also suggested social media is to blame for bombarding consumers with adverts and influencers, and fuelling impulsive purchases.
This fire is further fuelled by buy now, pay later schemes. While they can often seem an appealing way to try on clothes ‘for free’ or delay paying for that ‘must-have purchase’, Kevin warned consumers to look more closely at the repayment terms before diving in.
“I’ve got friends that struggle to sleep, so what do they do in the middle of night? They go online and they start buying stuff. So that’s where the likes of social media and the immediacy of new technology can create problems so we just have to be careful,” he warned.
Top tips for getting out of debt
Most of us will borrow money at some point in our lives, it’s very normal. But when debt, interest and repayments begin to spiral, it can start to get stressful.
ADVERTISEMENT“Don’t bury your head in the sand,” Kevin stressed.
“The worst thing you can do is when those bills come through, you just rip them up and put them away. The problem will not disappear and then it will compound and the implications of that will get far more severe.”
The first thing he suggests doing is talking to your bank or loan provider to see if payments can be rescheduled. Very often repayment terms can be lengthened to reduce your monthly payments.
Illegal loan sharks, sometimes presenting as legal and preying on the vulnerable, and legal payday loans, which provide quick cash, can sometimes seem like an appealing short term fix, but repayment terms are unfavourable and will only compound debt problems in the long term.
ADVERTISEMENTKevin also highly recommended talking to friends and family about financial troubles. Whilst talking about money is taboo in some cultures and many people feel shame around debt, support from your network can help you make better financial decisions and reduce stress. It can also help to raise financial awareness and education.
“As a family or as a group of friends, why don’t you, every quarter or six months, sit down over a bottle of cheap wine – because you don’t want to overspend – but why don’t you just have a look at your outgoings? Have a bit of a competition trying to reduce it,” Kevin suggested.
What is a credit union?
One of Kevin’s key pieces of advice when it comes to dealing with debt is to avoid paying for advice. Spending more money to reduce your expenditure is counterproductive, he argued.
Instead, there are many charities out there ready to help. They can also help with resources to improve financial education so that jargon will feel less daunting and alien.
ADVERTISEMENT“The 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,” Kevin explained.
“So that plays into the hands of the banks and other financial institutions and we become very apathetic. We don’t change products as readily as we should. So that in itself creates a problem.”
And for those really struggling to make ends meet, and in need of borrowing some money, Kevin suggested looking to a credit union.
Credit unions are not-for-profit, member-owned and community driven institutions where members can borrow money at a lower interest rate than traditional lenders. Unlike banks, profits are not dealt out to shareholders, but instead are reinvested into the union to help offer lower fees and interest rates.
ADVERTISEMENTMembers are usually linked by a uniting factor such as work, location or industry.
The Big Questionis a series from Euronews Business where we sit down with industry leaders and experts to discuss some of the most important topics on today’s agenda.
Watch the video above to see the full discussion with Raisin UK’s Kevin Mountford.
