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An independent report has warned that growing numbers of UK families are being stretched to financial capacity. Borrowing has increased to record levels, with personal debt in the UK doubling since the turn of the century.
At the end of 2007 the UK personal debt stood at £1.380bn. With a growth rate increase of 10.0% for the previous 12 months, that equates to an increase of £120bn.
The total for consumer credit lending in September 2007 had an increase of 5.8% for the previous 12 months, bringing the total to £217bn.
The secured loans total on homes by the end of September 2007 equated to £1,163bn, an increase of 10.9% in the last 12 months.
The average debt for a UK household (excluding their mortgage) is £8,681. If you include mortgages, personal loans and credit cards, then an average adult owes £33,000. This amount of personal debt means that more and more people are defaulting on their debts. Banks and building societies, in order to recoup losses, will begin charging a standard annual fee on credit cards which will likely equate to £30 per year, the independent report warns.
As the Christmas season approaches, families are pressured into taking on more debt than at any other time of year. Purse strings are set to be drawn even tighter next year as it’s predicted that over a million people with see their discounted fixed-rate mortgage deals come to an end. They face an average rise of £140 on monthly mortgage repayments.
The report paints a bleak picture of current UK consumer borrowing trends, which now stands at £1.3 trillion. A worrying statistic estimates that Britain’s personal debt increases by £1 million every 4 minutes!
The Citizens Advice Bureau warned that the number of people seeking advice on debt has hit record levels. The CAB are currently handling 6,600 debt enquiries every day, providing advice on a range of issues including debt consolidation, debt management and bankruptcy-related enquiries. The surge in enquiries has increased to such an extent that they estimate an extra 5,000 new volunteers are needed to cope with demand.
By: Nick Cox
Article Source: www.ArticlesBase.com
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