Banks may be getting tougher with people who fall into financial difficulties, a debt charity has warned. New statistics from The Money Charity published today reveal that the amount of personal debt banks and building societies write off reached an all-time low during the first quarter of the year.
“While that may be a sign that people are better managing their debt, it could also be a sign that banks are less willing to write debt off and are showing a greater disposition to collecting repayments, including through debt management plans,” warns Michelle Highman, chief executive of The Money Charity.
The figures show that in the first three months of the year, banks and building societies wrote off the equivalent of £7.3m a day to individuals: that’s less than at any point since 2008.
In total, £669m of individual debt – including that built up on credit cards – was written off. The figure has plummeted by more than 80 per cent since 2010, when the amount written off was £3.447bn.
Meanwhile, the average household debt including mortgages was £54,629 in April, up from £54,556 in March. The figures also show that some £161m of interest was paid every day on personal debt in April.
“If you are borrowing it is crucial to know how you will meet the repayments and whether you can afford to do so,” warns Ms Highman. The charity offers resources to help at themoneycharity.org.uk.
You can get free debt advice from the StepChange Debt Charity on 0800 138 1111.