The Bank of England governor has warned that the rising numbers of families struggling with unsecured debt is potentially a large social problem for the UK.
The Bank of England governor has warned that the rising numbers of families struggling with unsecured debt is potentially a large social problem for the UK.
Mervyn King made the comments at the launch of the Bank’s May inflation report. Mr King said: The proportion of unsecured debtors reporting their debt as a serious problem has gone up, the number of calls to the National Debt Helpline has risen quite sharply, so I think the signs are that a potentially large social problem, with many households getting into difficulty with their debts, is materializing.
Mr King also said that householders should not rely on the value of their home increasing to take on more debt, commenting: The level of house prices still seems remarkably high relative to those measures that put it into context.
Recent figures have highlighted the UK consumer debt issue. The Department for Trade and Industry recently said that individual voluntary agreements – or IVAs – were up by 142% compared to last year. One in five adults in the UK have unsecured debts of GBP10,000, while the total UK consumer debt stands at around GBP1.2 trillion.