Lenders lose their appetite for debt forgiveness

 

Banks may be getting tougher with people who fall into financial difficulties, a debt charity has warned. Statistics from The Money Charity reveal that the amount of personal debt written off by banks and building societies 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 for collecting repayments, including through debt- management plans," warned Michelle Highman, chief executive of the 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 a smaller sum than at any point since 2008.

Average household debt is still rising. Including mortgages, the figure was £54,629 in April, up from £54,556 in March. Meanwhile, around £161m of interest was paid every day on personal debt in April.

"If you are borrowing, it is crucial to know whether you can afford to do so," warned Ms Highman. Help is available at the charity's website, themoneycharity.org.uk.

You can also get free debt advice and help from the StepChange debt charity by calling 0800 138 1111.

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