Debt Problems Prompt Payday Loan Caution

Mon, 08 Feb 2010

A new report from the National Audit Office has revealed the extent of the debt problem in the UK. Personal debt levels in the UK currently stand at £1.46 trillion, while there had been a 30 per cent increase in the number of people seeking debt advice in the past year. So high is the demand, two debt agencies have been forced to refuse new clients as their waiting lists are already six weeks long.

The £1.46 trillion figure equates to £56,000 of debt for every household in the UK, 60 per cent high than the average pre-tax income. The grim figures have prompted analysts to forecast that as many as 150,000 people could be made insolvent this year – a 15 per cent increase on last year’s figure.

According to the Consumer Credit Counselling Service, the typical borrower has 11 different creditors, with debts of £24,300 without including their mortgage .

Troubled borrowers are being urged to think carefully about how to finance their debts. Credit unions are available to help, and borrowers are being advised not to use short term financial solutions such as payday loans as a long term financial measure.
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