Britain is continuing to head into a debt-ridden future as MoneySuperMarket’s research has uncovered a worrying set of new discoveries recently. 40% of those targeted on the survey have borrowed heavily to keep their homes above financial water and 43% owe more money in unsecured credit agreements than a year ago.
However, there is a growing optimism about the future of the UK economy but it is believed that this is actually a credit crisis in disguise. More spending and house prices on the rise could be due to increased unsecured borrowing by the seemingly hapless UK public. Despite the fact that this may be improving job availability, there could be a rude awakening just around the corner.
Things are looking financially bleak for our 18-24 year olds, although they look unlikely on the whole to be offered a mortgage; it seems that the average case study is typically £5,446 in debt. Cards are still the preferred credit medium of choice and 46% of adults owe money on one brand or the other. Overdrafts get the silver medal and the winners/losers’ podium is propped up by the evergreen personal loan option.
There is some good news on the horizon for us Brits, our GDP has expanded by a decent 1.9% and that is the biggest jump since back in 2008. MoneySuperMarket’s Kevin Mountford did add that it could be time for the general public to start slowing down on the plastic spending and this may draw a more realistic GDP for the nation. Credit spending is a part of modern life, but taking advantage of the record low interest rates is a habit that could soon backfire.
60 percent of those currently with unsecured debts are under the impression that they will be debt free within 12 months, but 12 percent were happy to leave them for another couple of years.
When they rise…
Mr Mountford went on to opine that once the ultra-low interest rate start to rise, there may be a lot of people who will struggle to make even the minimum repayments. A fixed rate is not always the obvious option when faced with some rather tasty variable rates, but over the next few years it seems that these will probably be the wiser choice.
Finally, Mr Mountford advised the typical UK borrower to try their best to clear all outstanding debts whenever possible. He understood the enormity of such a task but believes that by choosing the correct product in the beginning, the borrower has a better chance of paying the loan back early enough to reap the dividends.
If you are worried about your own personal debt situation and have read this article, please think about speaking to Dissolve Debt immediately. We can put a plan in place that suits your own circumstances and can soon get you back on the road to debt recovery. We have a team of friendly and helpful exerts waiting for your now, so pick up the phone and call Dissolve Debt today.