The number of people with personal debt problems increased by 26 percent in 2009. With almost £1.5 trillion of personal debt in the UK, the outlook for 2010 does not look any better.
The figures from the insolvency service published in February showed that the number of people suffering with serious personal debt problems leading to their insolvency increased to 134,000 in 2009 from c106, 000 the year before.
With reports of the economy returning to growth, questions are now being asked about whether the number of people declaring themselves insolvent will also start to fall.
Unfortunately the signs are not good.
Jobs under pressure
Employment it seems continues to be precariously balanced. In January this year, the number of people collecting unemployment benefit increased by 23,500.
Although the UK economy grew tentatively in the final quarter of 2009, the current economic climate remains tough for business. Many companies have gone through a period of cost cutting - shedding jobs and reducing working hours.
The current uncertainty surrounding interest rates and the state of the global economy will surely mean that well run businesses maintain a very tight ship for the foreseeable future. As such, it seems unlikely that those businesses will begin hiring again anytime soon.
The additional worry is that after the general election expected in May, the incoming government will be forced to announce significant cuts in public employment budgets resulting in redundancies.
With increasing numbers of unemployed, the number of people who start to struggle to repay their debt will certainly increase.
Interest rate worries
According to the Governments English Housing Survey, approximately 68% of all households in the UK are owner occupiers many of whom pay a mortgage. Low interest rates over the past 12 months have meant that many of these family's monthly mortgage payments have been significantly reduced.
This reduction in household costs has helped maintain or even increase consumer spending for some families.
However, it has almost certainly helped stave off financial disaster for others whose income has reduced due to redundancy or shorter working hours.
It is generally agreed that the only direction interest rates will go from here on in is up. The question simply remains when? As rates do eventually increase, many individuals will start to feel financial pressure that they were previously cushioned from.
This will inevitably lead to an increased number of people experiencing problems with personal debt
At almost £1.5 trillion, personal debt levels in the UK remain extremely high.
Low interest rates have allowed some to reduce their levels of debt. However, a large number of people are still walking a financial tightrope from which they could easily fall if their income were to reduce or expenses increase by only a small amount.
0 komentar:
Post a Comment