Is Britain Facing A Disaster In Debt?  (2024)

There is a shock news today revealed that the household debt has soared to two fifth in just a span of 6 months. The report of Aviva’s Family Finance has revealed the data today. The report says that the total debt of the household today is £13,520. This is nothing but an increase of £4000 from the £9,520 in the last summer. By this way, economists have told that Britain is currently into a disaster scenario because of the household debts. This is probably the highest debt level that has got recorded in this quarterly in the past 2 years.

Caroline Siarkiewicz commented on this

It’s the highest levels seen in the quarterly survey for two and-a-half years. “It is concerning to see that household debt has grown to such levels,” said Caroline Siarkiewicz, head of UK debt advice for the Money Advice Service. The rise in the figure – which doesn’t take account of mortgage debt – means the average amount owed is 24 per cent higher than in winter 2011 when the data was first recorded.
“The alarming levels of rising household debt, along with a recent reduction in income and savings levels, paints an uncertain picture for the family purse in 2016,” said Louise Colley, managing director, protection, Aviva Life UK.“With the possibility that the Bank of England could raise interest rates this year, families who have grown accustomed to cheaper credit need to ensure they are still fully prepared to manage debt repayments, as well as other monthly outgoings, should rates go up,” she added.

Bank of England will decide on interest rates soon

​The Bank of England’s rate setting committee is due to meet tomorrow to decide what to do with interest rates. After 88 months of no change – the base rate has remained at 0.5 per cent for the length of that time – tomorrow’s meeting is not expected to be any different. But there is growing expectation that there could well be a rate rise soon – and that could be disastrous for anyone in debt as it will almost certainly lead to higher costs for borrowing. Bearing that in mind, Aviva’s reports makes for sobering reading. It suggests average credit card debt has climbed by more than a fifth in the last six months, from £1,960 in summer 2015 to £2,370 now.
The amount owed on overdrafts has increased even more quickly, rising by almost two-fifths from £870 to £1,190. Meanwhile, one in four families now owes money on a personal loan – that’s a rise of almost a quarter froma year ago – with an average outstanding balance of £2,080. Over the last five years, mortgage debt has also risen by a more than a fifth. “When money is tight it is tempting to turn to a loan or credit card – but it’s important to remember these will have to be paid back in the end, and the amount you owe may grow depending on the interest rate on the loan or card,” warned Ms Siarkiewicz. To know more on finance and trading, you can always follow us at the https://twitter.com/tradinginvestme