The current state of debt in the UK

The current state of debt in the UK

It seems that Britain is addicted to debt and faces a terrible legacy as the recession begins to bite, Liberal Democrat Leader Nick Clegg warns, as new analysis from the Liberal Democrats shows that total personal debt has risen by £1 trillion since Labour came to power. This figure equates to an additional £10m for every hour Labour has been in government. Britons now owe £1.4 trillion in total, with debt repayments of nearly £95bn each year, equating to £3000 per second. Nick Clegg goes on to say, "The fact that Britain's economic growth has been built on a mountain of personal debt means that we are now especially vulnerable to the global economic downturn."
The above statements have been repeated verbatim from the Liberal Democrats website. But the bone of contention is not whether the Labour is responsible, but the fact that British citizens are willy-nilly being suckered into the debt trap.

The alarming rate at which we in the UK are accumulating debt goes to show total disregard of prudence in favour of popularity. Whether it is the Conservatives, Liberals or Labour, the pursuit of popularity and votes, bank politics has led to mounting debts in the UK. This has a cascading effect on personal debt as well. The situation is likely to get worse making the present situation look almost innocuous.

Consider the following figures:

• The total secured lending on homes in the UK, at the end of June 2008, stood at £1,212 billion. This has increased 7.5% in the last 12 months.

• The total lending, in the UK, in June 2008 grew by £4.0 billion. Secured lending grew by £3.1 billion in the month and Consumer credit lending grew by £0.9 billion.

• The average household debt in the UK is £9,309 (excluding mortgages). This figure increases to £21,650 if the average is based on the number of households who actually have some form of unsecured loan.

• The average household debt in the UK is £58,000 (including mortgages).

• The average owed by every UK adult is £30,424 (including mortgages).

• 424 mortgage possession claims will be issued and 302 mortgage possession orders will be made today

If the above figures do not ring alarm bells in your mind, you are bound to regret not taking steps to liquidate your debt in the near future. It is not I who is sounding the alarm but noted economists and finance barons. The faster we get rid of debt the better. As the unemployment rates rise and panic sets in the financial markets, the tools which are available at present will disappear making repayment all the more difficult for many.

The government in the UK is meanwhile reacting on predictable lines. From the measures taken till now, it is obvious that they are intent on bailing out the Banks and taking short term action rather than finding long term solutions to the problems. The fat bonuses which directors of sick banks have inked for themselves may have elicited horrific uproar from the public, but with limited response by government officials in the UK.

The way out is to clear our personal debt before it is too late. You deserve debt freedom, it is good for you, good for society and good for the World.

Protect yourself from the mounting crisis.

You cannot fail to be aware of the mounting crisis in the economy. The Bank of England has now cut interest rates to the lowest level ever at just 1%, in a bid to get people and businesses to spend more money.

The problem is that whilst many people have the advantage of lower mortgage payments, the cost of personal loans and credit cards is actually rising.

MBNA the largest provider of credit cards in the UK has been raising its rates steadily for months and many of their customers are finding that when the 0% rate finishes on new cards, the APR is suddenly 36% or more, much higher that advertised when they originally took out the agreement.

America Express has been doing the same thing with its customers, with interest rates as high as 46% APR, when they started at less than 17%.

Business failures are running at almost 22,000 for 2008, the highest level since the recession of 1992, with a much higher level expected in 2009.

The Financial Times today reported:
“The number of people who declared themselves insolvent was broadly the same as in 2007, at 106,544. This equates to around one in every 400 adults.

However, there was a sharp rise in the fourth quarter as 29,444 individuals declared themselves bankrupt or took out an Individual Voluntary Arrangement – up 18.5 per cent from the fourth quarter of 2007. This suggests that the numbers are likely to increase in 2009 as unemployment rises, placing further strain on over-indebted consumers.”

What does this mean for ordinary people?

In simple terms it means that the cost of unsecured debts like personal loans and credit cards is rising, whilst people ability to pay them is declining.

The only real advice for people is to get out of debt and build up the security of their income.

There are several way to secure your income, firstly, it is advisable to diversify your income sources, this can mean taking on a second job, or starting your own part time business working from home.

Obviously you need to make sure that you are able to keep you full time job, so you must be careful how you decide to create income, for example, if your current job finished at 5:30 and you take on another job starting a 6pm and finishing a 2am, you are not going to be able to get enough sleep and general rest, which could have a big affect on you performance at work and the quality of your life.

Therefore choose your work carefully and ensure that you will enjoy it.

When it comes to getting out of debt fast there are a number of options, including getting you personal debts written off. This simply means that the bank decides that they cannot collect the money and so the write it off. If this is done in the correct way it also will not affect your credit rating.

So take action now! Don’t wait until the “stuff hits the fan”, plan now to set yourself free to live your life without fear or stress.

To your future,
Chris

P.S. If you want to know if your debts can be written off take a look at http://www.IDeserveDebtFreedom.com

P.P.S If you are looking for extra income and a way to secure your future, take a look at http://www.IDeserveMoneyNow.com