Personal Debt Expected to Rise
Rising unemployment and high inflation is expected to lead to a sharp rise in personal debt problems, a leading charity warns.
National debt charity Consumer Credit Counselling Service (CCCS) is warning thousands of people could end up in debt over the next few years.
They state that unemployment is a major factor in personal debt problems as almost half of people they counselled last year in debt cited this, or reduced income, as the main reason for their debt problems.
The Office for Budget Responsibility (OBR) revised its prediction on employment over the next few years, showing unemployment is yet to peak, as is inflation and household debt. In 2011 the revised unemployment forecast is up to 8.2 percent.
“The next few years will see a significant rise in the number of people in need of financial help and advice,” said Delroy Corinaldi, CCCS External Affairs Director.
“The over-indebted should ignore misleading claims from the for-profits that they are the only alternative.”
The OBR’s amendment to its inflation assumption rose to 1.1 percent and 0.6 percent for 2011 and 2012 respectively.
CCCS clients had only £43 a month disposable income to repay over £22,000 in unsecured debt.
Last August, the OBR said household debt would decrease as a percentage of household income over the next five years, but this will now increase from 160 percent in 2011 to 175 percent in 2015.
Money problems are the main concerns over the new laws to come into effect this Sunday on extended paternity leave, uSwitch showed.
While many fathers would like to take more time off to spend with their new born, just 59 percent would actually take advantage of this. A further 16 percent think they could lose their job if they took the time off.