Unsecured debts 'shot up in 2008'

25/03/2009

Britons are facing a growing personal debt mountain, with money owed on personal loans alone growing by £1.6 billion last year.

This is the stark warning of a new report from financial website Unbiased.co.uk, released today.

According to the study, paying off the interest on the nation's personal debt would require all of the earnings from the entire nation from January, February and March - combined.

In total, credit card debt was found to have increased by £4.9 billion and equity release debt by £6.5 billion in 2008.

"A concern that EuroDebt has is that the profile of credit usage has changed, especially with regard to credit card usage where APRs definitely aren't reducing," Kevin Still, EuroDebt director, commented.
"It would appear that many consumers are having to use credit facilities as a necessity rather than for non-essential expenditure like holidays and luxury goods. We feel that we are still in the lull before the storm and that for many credit limits will be hit with very few options to continue meeting priority monthly obligations and paying for essential items like groceries. Seeing someone's card declined at the ATM or supermarket is now becoming a more common sight that everyone can relate to."

Recent figures from charity Credit Action showed that the nation's total personal debt, including mortgages, exceeds £1.45 trillion.

Tags; Housing Debt and Bills, Credit Card Lifestyle,

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