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More than 4 million fear they`ll be made redundant Consumers took on more mortgage debt in July Debts called in by parents Teenagers `scared of debt` Rising household costs could pressure people in debt Pensions debt may impact workers` retirement funds Welsh young adults `at highest risk of debt problems` Over 50s can`t afford to enjoy retirement because of debts Budget: tackling the nation`s debt Short-term debt: `no need for price control` The cost of clearing debt Education debt Tackling the national debt Number of mortgage deals on offer exceeds 3,000 Almost 5 million take on debt to pay household bills OECD: household debt more than 120% of disposable income Petrol price falls help people in debt Amount of mortgage debt taken on at lowest level in ten years Northern Ireland sees significant IVA rise Overdraft debt `becoming more expensive`

Deflation ‘increases the debt burden’

28/11/2008

Deflation isn’t just bad for the economy, The Telegraph reports – it also increases the burden of debt.

When prices are shrinking, people tend to wait before making purchases. If something’s going to be cheaper tomorrow, why buy it today? This is clearly bad for the UK’s economy – and therefore its citizens – but deflation also has a more direct effect on people with debts.

Basically, inflation (the normal state of affairs) means money is worth less all the time; a pound today isn’t worth what it was back in 1980. Deflation, now acknowledged as a real possibility, has the opposite effect, which means people with debts will have to put more effort into paying off each pound of debt.

As The Telegraph puts it: ‘If all you do is service the debt – in other words, pay just the interest without paying off any of the principal – the amount owed will become 5pc more onerous each year.’

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More than 4 million fear they`ll be made redundant 16/12/2010 - According to R3`s quarterly personal debt tracker, more than 4 Consumers took on more mortgage debt in July 26/08/2010 - Consumers took on £2bn more mortgage debt than they repaid Debts called in by parents 26/08/2010 - According to research, `the bank of Mum and Dad` is Teenagers `scared of debt` 19/08/2010 - Nearly two thirds of teenagers are `scared` of debt, according