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Households still struggling with finances

Households still struggling with finances

Category: Money

Updated: 13/12/2010
First Published: 13/12/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Low interest rates have failed to boost the finances of UK households, according to a new survey conducted on behalf of the Bank of England.

The study carried out by NMG Consulting found that almost half of households are worried about their level of debt, with their concerns having increased over the last two years.

More than half of those questioned said they had difficulty in meeting payments for unsecured debts, such as credit cards and personal loans.

Meanwhile, of those people who want to borrow, half said that the availability of credit had deteriorated.

Homeowners with large mortgages are finding it particularly hard to secure a new deal, while tenants paying for rented accommodation have also struggled to keep their finances in check.

Despite a rise in credit card rates over the past three years, people admitted that they had become increasingly reliant on their flexible friends and personal loans to get by.

Although people admitted to having high amounts of debt to their name, few appear to have been taking advantage of the low interest rate environment to pay off their loans.

"The burden of unsecured debt has risen this year, most likely reflecting a combination of weak earnings growth and the interest rates on unsecured debt remaining high over the past two years," said the Bank.

If you're worried about debts, debt advice specialists such as Debt Free Direct, which offers free and impartial advice to those with debt problems, are a good first port of call.

Helpful information can be found in Debt Free Direct's Debt Advice Guide, Debt Management Plan Guide and IVA Guide, which can all be downloaded for free.

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