Household Debt Rises to Reach Highest Levels Since December 2008
January 6, 2017
The collective scale of household debts in the UK have risen in recent months to reach the highest level recorded since the immediate aftermath of the 2008 financial crisis.
According to official figures from the Bank of England, the value of personal debts throughout the country increased by as much as 10.8 per cent in the 12 months up to the end of November 2016.
The figures, which include credit card and personal loan debts but exclude mortgage loans or student debts, show that the UK’s overall personal debt level rose steadily at an annual pace of 10 per cent during the second half of last year.
The last time that the nation’s debts were worth more than they were in November 2016 was as long ago as December 2008, the Bank of England has said.
Spokespersons for the debt help charity StepChange have responded to the Bank of England’s latest figures by suggesting that they point to worrying trends among consumers across the UK.
“Alarm bells should be ringing,” said the charity’s head of policy Peter Tutton.
“Previous experience shows how such increases in the levels of borrowing can leave households over-indebted and vulnerable to sudden changes in circumstances and drops in income that can pitch them into hardship.
“Lenders, regulators and the government need to ensure that the mistakes made in the lead-up to the financial crisis are not repeated and that there are better policies in place to protect those who fall into financial difficulty.”
StepChange has also called for indebted consumers from England, Wales and Northern Ireland to be given the opportunity to enter formal debt arrangements with their creditors without formally entering insolvency, as they can already in Scotland via Debt Arrangement Schemes.
The charity has said that such schemes give debtors a considerably better chance of turning their financial problems around without entering insolvency because they’ll be protected for a period of time from the prospect of having creditors consistently increase their fees and interest payment levels.
If you are struggling to cope with your personal debts and you live anywhere in Scotland then Scotland Debt Solutions can help. You can contact us at any time to arrange a free and confidential consultation.
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