News - Debt levels rise in UK
September 13th - Borrowers in difficulty with debt have risen to record
amount
The number of people in difficulty with debt has risen in 2007 to a
record amount. The biggest problem for most of us are store and credit
cards, which accrue high interest charges - these alone account for
a quarter of the personal debt in the UK.
The Citizens Advice Bureau (CAB) are now receiving up to 6.5 thousand
enquiries every day, regarding debt help. this is an increase of 20%.
Annually, 1.7 million people contacted them last year looking for advice
with their bills.
Recent figures from the Bank of England have revealed personal borrowing
in UK now totals £1.35 trillion (this includes mortgages as well
as other debts). Chancellor Alistair Darling* has now asked UK banks
to be more careful who they lend to.
What is the best way to handle your finances, so you don't become one
of the debt statistics? Many feel that some sort of debt management
instruction should be included in the school curriculum. So in our consumer
orientated culture how do we tackle personal debt?
Society's attitude to debt has changed considerably over the years,
with our grandparent's generation rarely admitting to debt problems
openly. We don't tend to save before we buy anymore.
Today, debt is discussed openly and it is generally accepted as something
that can happen to many of us, often due to unexpected events, such
as divorce, unemployment or illness. There is far more help and advice
available thankfully, and bankruptcy is now the last resort to financial
problems, with many other options available to those in difficulty ,
such as free debt counselling, IVAs, etc.
If you are suffering in debt and need to repair the damage what steps
can you take?
There are also many more choices available to those wanting to save
money on their debts, and this is made much easier by the internet and
the various comparison sites available to help you make your choice.
The financial market is very competitive which means there are lots
of good deals being offered. The answer is choosing the right one for
your lifestyle and financial situation. There are easy and cost free
ways to cut your costs:
- Change your standard rate mortgage for a lower rate mortgage - higher
interest rates means the cost of borrowing has been raised and also
some building societies have increased their Tracker mortgages, but
there are still new fixed-rate mortgages being offered. The high street
banks account for only 60 per cent of lending offered, some independent
companies offer competitive rates for those who cannot meet the tighter
lending criteria, such as the self-employed.
- Transfer your credit card debt to another provider offering a low
or zero rate interest rate. It is important to switch again though
to a better rate when the 'bonus' period is up. keeping on top of
this will soon reduce your debt.
- Change your current bank account for a better deal - many banks
will include moving your overdraft too and pay you interest when you
are in credit.
- A Debt Consolidation loan to cover all your existing debts will
make your monthly repayments less by stretching your debt over a longer
period. As always you should shop around for a competitive rate.
Find out more about dealing with debt
*Why the cat picture? Alistair
Darling's cat Sybil has been all over the news this week and Tonto,
the office cat here at Loansite was feeling a little left out so here
he is...
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