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12/01/2005
UK credit card debt breaks £1 trillion mark
The latest research conducted by financial specialists Grant Thornton and ITV News has revealed that average credit card debt per UK household now stands at almost £2,300 and is at its highest in London, where average household debts total £2,861.
"Having broken the trillion pound mark, UK consumer debt is at an historical high and now amounts to more than the whole external debt of Africa and South America combined. Contributing to this still-growing debt mountain is the fact that UK consumers now have a heady total of 66.8 million credit cards at their fingertips – a worrying five times the European average," said Mark Allen, a personal insolvency specialist at Grant Thornton.
Although more than 80% of these huge borrowings are secured, mainly on mortgaged homes, a menacing £168 billion of UK consumer debt is unsecured. This amount is made up of over £100bn of personal loans, over £56bn of credit cards, just over £3bn in store cards, almost £3.5bn in instalment credit and the remainder, over £5bn, in mail order credit.
"Soaring unsecured credit continues to go hand in hand with soaring numbers of individuals falling into the spiral of debt - the problem rests squarely on excessive consumer borrowing and spending," said Allen.
"Regional variations aside, the picture of debt we are seeing is a familiar one from John O'Groats to Land's End, one of more and more individuals with mortgages in the region of £50,000 to £100,000 and commonly credit and store card debts of around £50,000. It is clearly an untenable financial situation," said Allen.
"Looking ahead into 2005 heightens our concerns", Allen continued. "A possible fall in housing values could see the problem get worse as people's ability to remortgage, a practice often used to repay debts, will reduce. Even mild decreases in the value of housing could trigger an alarming rise in the number of UK insolvencies. With bankruptcies already numbering 126 per day for 2004, the future will set new precedents – personal insolvencies will be off the scale."
Grant Thornton have calculated that an increase in base interest rates to just 5.5% would take up more than a quarter of average surplus income in the UK as a whole, and over half the surplus income in the North-West. Should base rates reach 7.5%, the additional cost of mortgages would completely eliminate surplus income in the UK as a whole.
"Recent indications from the Bank of England seem to suggest that an increase in interest rates is not on the cards in the near future. However, if and when an increase comes, debt-laden consumers should beware", concluded Allen.
(GB)
"Having broken the trillion pound mark, UK consumer debt is at an historical high and now amounts to more than the whole external debt of Africa and South America combined. Contributing to this still-growing debt mountain is the fact that UK consumers now have a heady total of 66.8 million credit cards at their fingertips – a worrying five times the European average," said Mark Allen, a personal insolvency specialist at Grant Thornton.
Although more than 80% of these huge borrowings are secured, mainly on mortgaged homes, a menacing £168 billion of UK consumer debt is unsecured. This amount is made up of over £100bn of personal loans, over £56bn of credit cards, just over £3bn in store cards, almost £3.5bn in instalment credit and the remainder, over £5bn, in mail order credit.
"Soaring unsecured credit continues to go hand in hand with soaring numbers of individuals falling into the spiral of debt - the problem rests squarely on excessive consumer borrowing and spending," said Allen.
"Regional variations aside, the picture of debt we are seeing is a familiar one from John O'Groats to Land's End, one of more and more individuals with mortgages in the region of £50,000 to £100,000 and commonly credit and store card debts of around £50,000. It is clearly an untenable financial situation," said Allen.
"Looking ahead into 2005 heightens our concerns", Allen continued. "A possible fall in housing values could see the problem get worse as people's ability to remortgage, a practice often used to repay debts, will reduce. Even mild decreases in the value of housing could trigger an alarming rise in the number of UK insolvencies. With bankruptcies already numbering 126 per day for 2004, the future will set new precedents – personal insolvencies will be off the scale."
Grant Thornton have calculated that an increase in base interest rates to just 5.5% would take up more than a quarter of average surplus income in the UK as a whole, and over half the surplus income in the North-West. Should base rates reach 7.5%, the additional cost of mortgages would completely eliminate surplus income in the UK as a whole.
"Recent indications from the Bank of England seem to suggest that an increase in interest rates is not on the cards in the near future. However, if and when an increase comes, debt-laden consumers should beware", concluded Allen.
(GB)
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21 October 2004
Charity calls for credit reform to tackle rising debt problems
Citizens Advice has issued a credit warning to consumers after revealing that people approaching the agency with debt problems had risen by three-quarters over the past seven years. On the back of the figures, the charity has today called for a reform of Britain’s "outdated" consumer credit laws to be included in the Queen’s Speech later this year.
Charity calls for credit reform to tackle rising debt problems
Citizens Advice has issued a credit warning to consumers after revealing that people approaching the agency with debt problems had risen by three-quarters over the past seven years. On the back of the figures, the charity has today called for a reform of Britain’s "outdated" consumer credit laws to be included in the Queen’s Speech later this year.
04 February 2010
Interest Rates And 'Easing' Held
The Bank of England today held interest rates at 0.5%, with so-called 'quantitative easing' being mainted at £200 billion. The UK officially climbed out of recession last month, following a 0.1% growth in output. "After a substantial fall in output, the UK economy recorded sluggish growth in the final quarter of 2009," the bank said this morning.
Interest Rates And 'Easing' Held
The Bank of England today held interest rates at 0.5%, with so-called 'quantitative easing' being mainted at £200 billion. The UK officially climbed out of recession last month, following a 0.1% growth in output. "After a substantial fall in output, the UK economy recorded sluggish growth in the final quarter of 2009," the bank said this morning.
27 April 2012
Government Departments Outsourcing Debt Collection
Government departments tasked debt collection agencies with recovering almost £60bn in unpaid consumer debt last year, according to figures release for the first time by the industry.
Government Departments Outsourcing Debt Collection
Government departments tasked debt collection agencies with recovering almost £60bn in unpaid consumer debt last year, according to figures release for the first time by the industry.
15 April 2004
UK credit card debt rises to £53.5bn
Credit card debt has grown to its largest ever figure with the average UK card holder owing more than £1,100, according to the latest report. Outstanding balances on credit cards have risen by more than two-thirds over the last four years, mainly as consumers become more familiar with using credit cards to make purchases.
UK credit card debt rises to £53.5bn
Credit card debt has grown to its largest ever figure with the average UK card holder owing more than £1,100, according to the latest report. Outstanding balances on credit cards have risen by more than two-thirds over the last four years, mainly as consumers become more familiar with using credit cards to make purchases.
11 March 2004
Consumers and lenders could do more to consolidate debts: OFT
Better financial awareness among consumers, and clear, accurate and relevant information from credit providers are required to make the use of debt consolidation fairer and more transparent, according to a study from the Office of Fair Trading (OFT) published today. The OFT has estimated that, in 2002, £32 billion of unsecured lending and £8.
Consumers and lenders could do more to consolidate debts: OFT
Better financial awareness among consumers, and clear, accurate and relevant information from credit providers are required to make the use of debt consolidation fairer and more transparent, according to a study from the Office of Fair Trading (OFT) published today. The OFT has estimated that, in 2002, £32 billion of unsecured lending and £8.
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