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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`

Debts and downturns the Bank of Englands view

03/12/2008

The Bank of England’s Inflation Report November 2008 takes a look at the last time the UK economy ‘experienced a marked slowdown’ – in the early 1990s – and compares it with today’s issues.

It points out that while household debt has increased, the proportion of household income spent on servicing that debt was much the same.

Back in 1990-91, the ratio of household debt to annual income stood at around 105%, but it reached 170% in the second quarter of 2008.

The fact that the ‘proportion of household income devoted to servicing that debt in Q2 was not greatly different from that in the early 1990s’ reflects the ‘significantly lower level of official interest rates in the more recent period’.

It’s worth noting that, so far, mortgages seem to be causing fewer problems this time – even though more mortgagors are devoting a large share of their pre-tax income to their mortgage payments than was the case in 1991, the percentage of mortgagors reporting payment problems was still much lower (around 9%) in 2008 than it was in 1991 (around 17%).

“Any kind of downturn is alarming, and people will obviously look to the last period of economic problems to try to get some idea of what lies ahead,” said a spokesperson for Debt Advisers Direct. “Of course, things are different this time, but one thing that hasn’t changed is the need for debt advice – anyone who’s over-extended their finances should seek expert help straight away.”

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Debt Advisers Direct offer free debt advice and a range of debt solutions, including debt management plans, debt consolidation loans and IVAs (Individual Voluntary Arrangements).

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