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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`

Household debt `could trigger another downturn`

28/01/2010

The high level of debt carried by the British public is one of the things that could trigger another downturn, economists are warning.

An article in the Telegraph warns that `some of Britain`s problems, such as its expected £178 billion budget deficit and high levels of household debt, will remain even as the economy comes out of recession and could trigger another downturn`.

It quotes Jonathan Loynes, Chief Economist at Capital Economics, who said that: "The problems are rather long-term. Household debt is based on the expectation that house prices would keep rising and we went into the downturn with the finances already in a pretty dreadful state."

The economies of countries such as Japan and Germany, with their larger manufacturing sectors, may have contracted more sharply than the UK`s as factories closed down - but the governments of those countries were also more able to stimulate their industries, helping them come out of recession faster than the UK.

Latest figures from the Bank of England show that the British public currently owe £1.459 trillion. £1.232 trillion of that is in the form of secured debt, while £227 billion is unsecured debt (personal loans, credit card debts, etc.).

The Bank`s figures show that people collectively repaid more unsecured debt than they took on in every month from July to November last year (figures for December haven`t been published yet). On average, they repaid around £400 million more unsecured debt than they took on in each of those five months.

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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