There is growing concern as personal borrowing increases at an alarming rate, leaving levels of debt at their highest since 2008. The latest figures top even the NHS annual budget.
Bank of England figures show that a huge £178.2 billion is now owed in unsecured credit, following a significant rise in borrowing at the end of 2015. November saw a whopping £1.5 billion borrowed. It’s a huge jump when compared to the 2012 figure for the same month, which was £157 million. These figures are not inclusive of mortgages.
Financial Experts Concerned
Figures for the last four years show a steady increase in personal borrowing – a worrying trend according to the Money Advice Trust charity, which runs the National Debtline. While a rise in consumer credit is to be expected during periods of economic recovery, this sharp rise could prove problematic. A large percentage of households will be in a position to absorb the additional debt, but many others will not. Research suggests that the coming month will see almost six million individuals struggling with debt after over one in three financed Christmas using credit.
Seek Advice Early
Experts stress that now is the time to consider paying off debts if possible. Interest rates are currently low but are likely to rise in the very near future. This expected rise is likely to be very gradual, but something consumers must consider carefully and allow for if they intend to borrow money. An increase of 0.25% to bring interest rates to 0.75% is anticipated in May 2016.
Those who have unmanageable credit commitments are advised to seek advice sooner rather than later. Organisations such as https://www.carringtondean.com/ can offer debt solutions, including IVA’S.
While credit can be the answer if faced with an unforeseen expense, changes such as interest rate rises, redundancy, illness or divorce can very quickly become a catalyst to problem debt, regardless of an individual’s earning potential or geographical location. Those who have faced debt have been shocked at how quickly things can become out of control, even where they have been careful with money. And the pressure that uncontrolled debt brings with it can prove crippling. Getting advice at this point, or preferably before, is essential. In the majority of cases, debts can be renegotiated to ensure they are more manageable.