In 2007 the UK suffered its largest recession for 40 years. We are now in a period of very low growth, with talk of possibly slipping back in to two consecutive quarters of negative growth. Why is this?
The cost of living over the past 12 months has risen to an all time high, with MP’s cutting more and more jobs and employers finding it difficult to keep hold of their staff, is leading to a staggering amount of personal debt within the UK.
Personal debt levels remain high with UK consumers. According to Credit Action the average household debt in the UK is £8,076. With interest rates on credit cards and loans at an all time high, yet the base rate remains at a record low. Credit card interest rates can vary from 15% to 30% that’s means UK households are paying on average £1,200 in interest alone per annum. This is highly profitable for the creditors and it is not uncommon for the high street banks to make billion pound profits.
The UK has seen many demonstrations in the last 18 months, the recent rioting in England and unions taking to the streets and showing their anger towards their standard of living being squeezed. The Chartered Institute of Personnel and Development has recently found that only 1 in 4 workers has had a pay increase and that 1 in 20 has had an actual pay cut. Inflation is at a record high, reports out today suggest it’s now at 5% and with downwards pressure on wages and jobs, the pain is clearly being felt. The High Street which traditionally saves the UK economy has been hit hard and many household names have either closed or in the process of closing.
Squeezed England is the phrase that the newspapers have coined for this particular difficult economic period. The North East was names the ‘Pay-freeze capital’ of Britain with 75% of workers reporting no salary increase this year. With inflation at 5% that’s a significant drop in their standard of living.
Is there any light at the end of all this? Where are people going to find the extra money to live?
The answer is that it is your secondary borrowing (loans, credit cards and overdraft) that are going to have to take up the shortfall. If you were paying £500 per month for debt, this is going to have to be £200 or whatever you can afford. The Banks and Creditors have leant large sums of money without regard to affordability and now they are going to have to face up to this profiteering.
To find out how quickly we can get you out of debt, try our Debt Settlement Calculator at http://www.settle-my-debt.co.uk