Could the UK’s debt crisis be easing?
Over the past year many have expressed grave concern over the rising level of consumer debt in the UK, with many households and individuals struggling with high levels of debt, and record number of bankruptcy and IVA applications being filed. However, some think that in 2007 the crisis may start to ease, as figures seem to indicate that consumers in the UK have finally gained a tighter reign over their finances, and are getting their financial situations under control.
Easy access to loans and credit cards over recent years has seen many people take on more debt than they could manage, and ending up in a huge amount of debt. However, an insolvency expert at PricewaterhouseCoopers stated: "I'm not sure it is a crisis. The bare figures look dreadful, but I think essentially the worse is over. There will probably be a hangover in 2007 but unless consumers start hitting their credit cards again I do not see it increasing significantly."
However, not everyone agrees with this prediction. The director of the Debt Advice Bureau stated: "The simple fact is the amount people are spending and borrowing is growing faster than their incomes - it is a simple mathematical equation. People will still continue to overspend. County Court Judgements will continue to rise, bankruptcies and IVAs will continue to rise, repossessions will continue to rise. We will still have increasing number of people in debt even if nothing nasty happens. If something nasty does happen, all bets are off."
A KPMG spokesperson added: "Is it a crisis? I would say it is - it certainly is for those involved. But the problem has been building up. This year was not a shock. Credit has been widely available, banks and consumers have not been acting responsibly. This year the problem became more visible. The problem is out in the open and people are talking about it more. It is almost like an alcoholic admitting he has a problem - part of the solution is admitting you have a problem."
Alisdair Milton
27th December 2006
More Information:
- General Loan Advice For Managing Debt
Debt is a really easy thing to get stuck in. Even if you are not extravagant monthly costs can spiral out of control, especially if you take your eye off the ball. So what can you do to avoid getting too far into debt and if you are there already how can you get out of it?
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It is easy for debt to get out of control. Student loans, losing your job, becoming ill or any number of other unforeseen events can easily cause debts to mount up.
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If it seems advertisements for debt consolidation loans are everywhere, it is because consolidated loans are big business. The primary reason for people taking out personal loans over the next year will be for debt consolidation.
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Did you know that switching lenders can save you money? Just because you agreed to a loan in the past, doesn’t mean that you have to stick with it forever. Most people stick with the same lender for years and years.
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