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How to deal with rising levels of household debt
It has recently been reported that UK household debt is currently at its highest level since the months following the financial crash of 2008. The new data released by the Bank of England shows a 10.8% growth in personal debt levels in the year to 30th November 2016 with the current figure standing at £192.2bn in the UK.
As a result of these latest figures, debt charities such as the Money Advice Trust and Citizens Advice have warned that they are facing one of their busiest January’s in a number of years while Step Change have called on the government to adopt a scheme which gives those in debt 12 months breathing space to get themselves back on track.
The government is currently reviewing the scheme proposal and whether to bring it in or not but the decision is 12 months overdue already. Step Change estimates that over those 12 months a further one million people have ended up in debt problems they are struggling with. The figures from the Bank of England also show that unsecured personal debt has grown at a yearly rate of 10% over the past six months.
These stats back up the warning from the Governor of the Bank of England, Mark Carney, last month regarding the high levels of debt in UK households. Rising levels of debt, a reliance on credit cards for basic purchases and Christmas, all point to a difficult January for many as debt charities have already warned.
They are preparing themselves for a record number of calls over the next few weeks but here is what you can do to tackle your own personal or your household’s rising levels of debt:
- Create a budget containing your monthly income and outgoings including debt repayments.
- Try to cut household costs by looking into switching suppliers and cut any unnecessary spending such as meals out, unused gym memberships etc.
- Get in touch with companies you owe money to and explain your current situation as well as discussing the possibility of setting up a repayment deal.
- Look into debt consolidation, it can help and offer you the breathing space you need but only do this if you can afford the repayments.
- If you receive a CCJ or statutory demand, don’t ignore it. Get advice from an insolvency practice or debt advisory practice as soon as possible.
- If you are really struggling, get in contact with us and we can provide you with free, confidential advice.
- Also, be aware that if you feel you are being chased for a debt you don’t owe, you can dispute it to make sure your credit score is not negatively affected.