Debt crisis? Didn't David Cameron say we're on the road to recovery?
The recovery obviously only applies to some folk. Millions are still facing record debt, with little sign that they're able to pay it off.
How much do we owe?
Collectively personal debt in the UK totals £1.43 trillion, which is close to its all-time high. Average household debt stands at £54,000. That's almost twice the level it stood at a decade ago. Only Ireland has a higher ratio of personal debt to GDP among European countries.
But things are getting better, as Cameron claimed, aren't they?
Not really. The Centre for Social Justice think-tank warned this week that the so-called bedroom tax and other benefit cutbacks could plunge more people into debt. Its Maxed Out report, published on Wednesday, suggested more than 5,000 people are already being made homeless each year because they cannot pay their mortgage or rent.
Is that all? 5,000 doesn't sound too bad, considering...
Consider this then: the think-tank said more than 26,000 UK households have been classed as homeless by local authorities in the past five years. Meanwhile some 3.9 million families do not have enough savings to cover their rent or mortgage for more than a month. If interest rates rise, and experts are predicting they could do so in 2015, many of these will be flung into financial difficulties.
So what did the report conclude?
That something needs to be done, and soon. The Centre for Social Justice said: "Unless proactive steps are taken, problem debt in the UK will continue to grow unabated." It said that people need to understand how their finances work. "There should be a national drive to improve financial capability and literacy. However, financial institutions also need to work to make their products more transparent and accessible."
- More about:
- Financial Difficulties
- Interest Rates
- Loans And Lending Market
- Local Authorities
- Think Tanks