Personal debt in Britain has reached £1.4tn – almost the same amount as Britains national economic output – according to a report that warns debt is wreaking havoc on peoples mental health and wellbeing. Poorer people are bearing the brunt of a storm during which average household debt has risen to £54,000 – nearly double what it was a decade ago. The report, entitled Maxed Out, found that almost half of households in the lowest income decile spent more than a quarter of their income on debt repayments in 2011. More than 5,000 people are being made homeless every year as a result of mortgage or rent debts. Christian Guy, director of the thinktank established in opposition by the work and pensions secretary, Iain Duncan Smith, said: Problem debt can have a corrosive impact on people and families. Our report shows how it can wreak havoc on mental health, relationships and wellbeing. Across the UK people are up until the early hours worrying about their finances and bills. The report ound that: • Personal debt in the UK, including mortgage lending, stands at £1.4tn – an average of £54,000 per household compared with £29,000 a decade ago. • Consumer debt had trebled since 1993 and now stands at £158bn; • More than 8m households have no savings, including half of low-income households; • Outstanding debt on credit cards has almost trebled since 1998 to reach £55.6bn; • There were 300,000 arrears on mortgage in 2012 – with 34,000 homes repossessed, a 60% overall increase since 2006. With falling real incomes and increasing costs of basic essentials, many – especially the most vulnerable – are sliding further into problem debt. The costs to those affected, in stress and mental disorders, relationship breakdown and hardship is immense. But so too is the cost to the nation, measured in lost employment and productivity and in an increased burden on public services. For the most financially excluded, there is often no option but to turn to illegal moneylenders. It is estimated that over 310,000 people borrow money from these criminals each year. Illegal moneylenders extort money from their victims, often arbitrarily raising interest rates, demanding payments or charging penalties. Their use of violence and intimidation terrorises people and communities, enforcing a veil of silence that allows them to escape detection. This is an inexcusable crime in modern Britain.
Posted on: Tue, 26 Nov 2013 11:54:47 +0000
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