Average debt tops £4k
Average debt tops £4k
Also In The News
|
Inter Milan have claimed the final spot in the quarter-finals of the Champions League after beating Ajax 1-0 on the night to claim a 3-2 victory on aggregate. |
Wednesday, 15, Mar 2006 09:09
Average adult debt in the UK has trebled over five years to break the £4,000 barrier for the first time.
According to research by Datamonitor, debt levels have rocketed from £3,012 to £4,021 for every adult in Britain as spending on credit cards and personal loans soars.
With 90 per cent of adults holding a credit card, total personal debt is at the record level of £1.2 trillion and looks set to rise further.
The report's author, Karina Purang, warned of the effects of heavy borrowing and subsequent bad debts on consumers, saying: "As a result of increased indebtedness and lenders adopting a more precautionary approach to lending, consumers with a less than good credit history may find it more difficult to get access to cheap credit."
Mortgages and loans are easier to get than ever before and competition between providers has led to firms pushing loans.
This was recently criticised by the government, which said that more should be done by lenders to ensure they are not targeting those who cannot afford to borrow.
Last December, the four major banks agreed to share information to stop people getting into debt they cannot shoulder and the government is offering more advice to people to help them get out of financial difficulties.
Despite this, more people are getting themselves into debt and it is hitting the economy with the Bank of England saying that write-offs rose by 27.6 per cent in 2004 to £3.7 billion in 2005.
While debt levels are the highest ever, people do not seem concerned, as a Mintel survey showed last month that only five per cent of debtors were worried about their situation.
However, as Ms Purang warns, this may soon change.