British Debt Hits £1.2 Trillion
17 March 2006
Market analyst Datamonitor has reported that total debt now stands at a staggering £1.2 trillion, having first tipped into the trillions back in July 2004.
The figure includes personal loans, credit card balances and mortgages, but it is today’s ‘spend now, pay later’ lifestyle that carries the blame.
As some consumers struggle to keep up with their loan repayments if they are able to meet them at all, Datamonitor finds that lenders are being forced into increasing their bad debt provisions in response.
The level of unsecured debt the Bank of England (BoE) wrote off in the first nine months of 2005 amounted to £3.7 billion, up from £2.9 billion for the same period in 2004.
This means that banks and other lenders are likely to take a more cautious approach to lending in the future, while borrowers with high levels of debt will find it harder to get more cheap credit.
Lenders interviewed by the analysts said that more consumers are now having their applications turned down.
Debt consolidation loans are an option for people struggling with large amounts of personal debt.