Problem debt has massive cost on UK economy
08/10/2014
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.”
Need financial advice?
Are you struggling with your finances? If you have any personal finance questions related to this news article, then please contact our financial advisers. You can get in touch by asking a question online, calling us on 0800 092 1245, or by arranging a visit.
Share this..
Related stories
Early 30s Britain's biggest borrowers
Adults in their early 30s have a higher level of debt than any other age group in the UK, according to Alliance & Leicester's latest Borrowing Monitor research.Average unsecured debts for this age group are nearly a third higher than the national average, standing at £5,863.People in their early 30s tend to have the largest mortgage loans in proportion to their salary and pay more interest than a...
Read MoreIs David Cameron ready for office?
As the political polls continue to give the Conservative party a significant lead over Labour, attention is now turning towards David Cameron with many asking the question as to whether he is ready for office. Only a few months ago when the Conservative party started to break down the Labour lead there was no mention of David Cameron's background or his experience but now the Conservatives have pu...
Read MoreMortgage lending to fall, says CML
Mortgage lending is set to fall, although house price inflation is likely to remain positive, according to the 2008 housing market forecasts from the Council of Mortgage Lenders (CML).According to the CML, in the current economic climate, publishing a housing forecast is tougher and more uncertain than usual, particularly because of the ongoing effects of the credit crunch.However, the organisatio...
Read MoreWould a hung parliament be the fairest outcome?
The prospect of a hung parliament in the UK hangs heavy over the political scene today with all three parties within four or five percentage points of each other and concerns that no one party is pulling away. The surge in support for the Liberal Democrats, after Nick Clegg's impressive TV debates, has seen votes in the UK effectively split three ways. While there are concerns about a potential hu...
Read MoreEuropean banks feeling the pinch in the money markets
European banks are today feeling the pinch amid signs that US financial institutions are reducing their exposure to European money markets. Today we saw the London interbank offered rate, commonly referred to as Libor, increase hitting highs not seen for 10 months. When you consider that the Libor rate does not include bank lending from Spain and Portugal we can only assume the real situation in E...
Read More