While recent figures displayed that unemployment in the United Kingdom dropped to its lowest level in over six years, this has not correlated with a reduction in consumer debt. In fact, new borrowing on loans, credit cards and overdrafts reached a staggering £1.25bn across November. A fall in people out of work appears to be insignificant due to debt rising to a seven-year high. Unfortunately, this is evidence of a dangerous trend – Britons are still relying on credit – as consumer helplines are busier than at the same stage a year ago.
The Bank of England’s research for November underlines how difficult a significant number of UK residents are finding combining reduced government financial support with high living costs. Many, regardless of their wealth, overbuy and consequently overspend around Christmas and the prospect of the first credit card bills of 2015 is likely to be feared by those under financial pressure. The £1.25bn rise in unsecured borrowing was the highest increase since Northern Rock was nationalised. This chaotic period from February, 2008 was in the early stages of the credit crunch, but effects of a worldwide economic crash appear to be continuing at an alarmingly difficult level for several citizens.
Unemployment now stands at 5.8 per cent of the adult working population, meaning there are nearly 31 million working according to the Office for National Statistics. Although more people are in work, this is not to say the UK is making big strides in combating their personal debt problems. Stella Creasy, shadow consumer minister, said Britain had a “massive looming personal debt crisis” and many households were in dire financial straits. She added: “They’re not buying big fancy TVs and posh holidays – they are borrowing to cover the gap between what they earn and what they need to pay for each month.”
There is an expected upcoming investigation on the UK credit card industry, due to aggressive marketing concerns in a field believed to be worth around £150bn. National Debtline and debt charity StepChange are expecting to receive plenty of calls in January and February as the financial fallout from late 2014 is likely to cause many taxpayers some money issues. StepChange dealt with 50,000 clients last January and this is likely to significantly rise in light of the soaring UK rates of borrowing.
At Trust Deed Scotland our team are dedicated to supporting clients across the nation, by giving free and impartial advice to whoever calls us. More often than not, letting your debt problems go unresolved will worsen your financial situation and adversely affect you and close family. These figures should not cause widespread panic as decisive action can be taken. Our fabulous TrustPilot rating demonstrates that we are a company you can rely on to resolve your debt issues in a caring and considerate way, as opposed to payday loan companies and credit card providers. They care about their profits whereas we are interested about people who need support.