Personal Debt on 7 Year HighFriday, January 25, 2019
Long-term income stagnation and steep rising in housing and transport costs are continuing to increase. With the volatile political environment and Brexit looming, those costs will keep on increasing and will become a bigger burden for people in already vulnerable positions. All of this does not come as a surprise, especially after the number of people claiming financial insolvency reaches a seven-year high.
New figures have shown that personal insolvencies have risen 35% in Q4 of 2018 compared to Q3. to 34,108 in the final quarter of 2018, up nearly 35 per cent on the previous quarter. According to the Insolvency Service, 2018 saw an increase of 16% against 2017. In the early of January, a TUC analysis found unsecured debt – which includes all debts except mortgages – had peaked at £15,400 per household, nearly an 18% increase since 2017.
“Household debt is at crisis level”, claimed TUC general secretary Frances O’Grady. “Years of austerity and wage stagnation has pushed millions of families deep into the red.”
Most people spend their wages on transport and housing as prices rise, which means that there is little left to inject into the consumer economy. We should also not forget about a rise in inflation, coupled with depressed wages and a credit squeeze. All of these have a snowball effect on other consumer-facing businesses, which are currently struggling to avoid financial difficulties, administrations and sell-outs.
The UK government cannot promise driving growth the normal channels – business investments, increasing the minimum lower wage, streamlining and simplifying services and increasing national manufacturing and exports. Instead, they focus on driving growth through austerity, wage stagnation and increasing the use of credit cards and loans after Brexit. This strategy will only bring more people to their knees, creating a bigger economic crisis than the one started in Greece back in 2008.
How Investor Compensation can help
Personal debt is spiralling out of control and will keep on increasing due to the unstable political and economical environment we are about to enter after the Brexit deadline. People borrowing money from shot-term payday lenders are increasing. With high interests that need to be repaid, people are left even more vulnerable than ever with higher debt than expected.
Complaints about payday lenders have more than tripled over the last year, according to the latest Financial Ombudsman Service (FOS) annual report.
Between April 2016 and March 2017, FOS received 10,529 complaints related to payday lenders that charge high interest rates for short term loans. The FOS upheld 59% of those complaints in favour of the borrower.
We urge people who liaise with payday lenders to retrieve back their interest through complaining. Depending on the amount enquired, households could be relieved a little from their daily debt burden.
What about PPI?
People who struggle with debt can be anyone – private tenants, social housing tenants, even home owners. If you had a mortgage, loan or credit card since the 1970s, you should probably raise a claim for mis-sold PPI. You should care because of refunds reaching up to 6 digits. Contact us on 0800 954 0817 or visit our website on www.ppiclaimback.co.uk, fill in the quick web form and one of our PPI experts will give you a call for advice.