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Increasing numbers defaulting on unsecured loans

Increasing numbers defaulting on unsecured loans

Category: Loans

Updated: 14/01/2009
First Published: 13/01/2009

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
A growing number of people failing to repay secured and unsecured loans are likely to force banks to make cutbacks, it has been predicted.

The Confederation of British Industry and PricewaterhouseCoopers (PwC) have found that defaulting on loans is becoming more widespread and financial institutions expect to cut jobs in an effort to reduce costs as a result.

According to John Hitchins, UK banking leader at PwC, confidence among banks and building societies is low, which could lead to "increasingly aggressive" cost-cutting.

"The value of non-performing loans is increasing even more rapidly than previously predicted and further deterioration is expected as the recession bites more firmly," he said.

Recent figures from the Bank of England revealed that unsecured loans and credit card spending rose in November, by a total of £0.4 billion.

However, the increase was below the average of the previous six months and the annual rate of growth of personal loans had slowed

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