Brits struggle with high-cost debt

09/12/2009

Half of Britain's borrowers are dependent on high-cost debt, new research has found.

The figures from the Office of Fair Trading show that consumers are turning to expensive credit due to the pressures brought on by the recession.

A quarter of those using so-called doorstep lenders are doing so to deal with financial difficulties.

The report also showed that as many as 26 per cent rely on credit cards and 19 per cent depend on store cards.

The total amount of credit stock in the UK stood at just under £300 billion pounds at the last count, according to the OFT.

Despite this, the review noted that people are putting a renewed focus on dealing with their debts as a result of their recession.

Kevin Still, director of EuroDebt, said that the debt management firm "welcomes the review and the need for more transparency in the costs of credit and the penalties associated with breaking contractual terms, which can be very costly.

"For people already in debt problems'>debt problems, we do not recommend servicing existing borrowing with further more expensive credit that may cause a debt spiral. Non-borrowing debt solutions, like Debt Management Plan'>Debt Management Plans (DMPs) should be considered alongside applying for further credit."

• Share
• 
• 
• Store
• 
• Follow
•