Number of people in serious debt rockets
According to a recent report the number of people that are in serious debt has risen by around 30% in the last year alone. Debt levels in the UK have been at the centre of concern for some years, as the debt mountain continues to rise and bad debt levels smash through unprecedented barriers.
According to the research the steep rise in the number of people facing serious debt problems is largely down to the five interest rate rises that have taken place over the past year, each of 0.25%.
The reports indicates that over eight million people in the UK have unsecured debts of around £10,000 or more. This includes loans, credit cards, store cards, and overdrafts. The research was carried out by Thomas Charles, the debt consultancy, and highlights the debt crisis that is facing the UK in light of the interest rate rises and rising monthly repayments that households are having to cope with. There has also been an increase in the number of people that are struggling to repay their debts.
There has been a 9% increase in the number of people that are struggling to keep up with repayment compared to last year. Around 25% of those with debts of £10,000 or more have stated that they struggle to keep up with repayments. Although the survey used over two thousand adults as respondents, it was found that those most likely to be struggling with repayments were consumers in the London area.
One official from Thomas Charles stated: "These high levels of unsecured debt are clearly linked to the rise in interest rates over the last 12 months. A record rise in house prices – especially in London and the south-east – has led to a growing discrepancy between mortgage payments and salaries. The high pressure to maintain social and commercial status, particularly experienced by women, often goes hand in hand with high expenditure on the high street."
13th August 2007
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