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Problem debt has massive cost on UK economy


Problem debt cost the UK £8.3 billion through the damages it causes to peoples lives, a leading debt charity has claimed.
StepChange debt charity has said that due to the problem of debt damaging family life, mental and physical health, productivity and employment prospects it comes as a massive detriment to the UK economy through costs to the welfare state, the NHS, local government and other agencies.

In the UK today there is £162 billion outstanding consumer credit, and millions of people struggling with money everyday. The charity has found that 2.9 million people are in problem debt, up to three million people are using credit to pay credit and 13 million people don’t have sufficient savings to last a month if their income dropped by a quarter.

StepChange has called for the government to do more to tackle problem debt and families struggling with money. They have proposed;
• New measures to support savings to help insulate household budgets.
• A breathing space scheme to protect people who confront their debt problems, seek advice and pay what they can afford. They should be protected against spiralling interest and charges and enforcement action by creditors.

Mike O’Connor, Chief Executive of StepChange Debt Charity said: “It is not just individuals who bear the costs of problem debt. Problem debt costs all of us, families, businesses and communities. Lifting the scourge of problem debt and helping prevent it occur in the first place makes sound economic sense. We need to see a concerted effort, especially with interest rate rises around the corner, by public bodies, lenders and charities to help people who are in trouble now or are in danger of getting into difficulty.”

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