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'Lower' UK borrowing hides lingering debt issues
Date: 25/6/2007 9:05:46 AM
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Despite recent reports suggesting that levels of credit card borrowing are now starting to subside, the level of personal debt in the UK still remains a worrying issue, a leading debt consultancy has claimed.
Although many more Britons are now starting to manage their debt more wisely, people should not become complacent, Thomas Charles explained.
Higher costs of living, interest rate hikes and the burden of mortgages have prompted many more people to look at their finances more closely, it said.
The comments follow recent reports from the British Bankers Association (BBA), which claimed credit card borrowing has continued to subside.
Last month the BBA saw more people pay off old debts on credit cards than take out new loans - with the total stock of credit card lending by the banks falling by £409 million.
James Falla, managing director of Thomas Charles, said it had still seen a large number of people struggling to manage their debt, despite claims of lowered borrowing: "The weird thing is, we are certainly not experiencing any reduction in the number of people coming to us asking for help.
"Perhaps the message is starting to get through [and] additional borrowing is starting to reduce. But let's not get too comfortable, because what about all the legacy of borrowing that's already happened.
"It's the legacy of the last fifteen or twenty years of lending that we are now dealing with."
He added: "I certainly would applaud any good work that people are doing perhaps in terms of not borrowing more, and trying not to be too obsessive in their borrowing."
Talk to an understanding counsellor on 0906 665 8013. Calls cost £1.50 per minute from a BT landline. Lines open 8am-10pm. Callers must have the bill payer's permission and be over 18. All calls are recorded. You do not have to give your name. Counsellors are members of BACP and either BACP accredited or hold higher diplomas in counselling. Stadn Ltd., PO Box 42183, London SW8 1WS
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