Rising debt sees overdrafts increase

The UK’s overdraft and personal loan debt levels have increased from £161 billion to £177 billion over the past year, with more people having to use them to cope with everyday living costs.

Recent figures from the Bank of England reveal the average authorised overdraft rate on a current account rose from 17.4 per cent to 17.9 per cent in June yet increasing numbers of consumers are forced to use those funds as the cost of living continues to soar, the Telegraph reports.

In addition, fewer personal loans are being granted by lenders, which is leaving people with few options, according to Tim Moss from moneysupermarket.com.

“The number of personal loans has fallen dramatically due to the tougher lending criteria from banks, so to still see such a rise in personal debt implies that people are using their overdrafts as a way to cope with everyday living costs,” he told the news provider.

According to figures from the Office of National Statistics, nearly two-thirds of consumers are unaware of what they are being charged by their overdraft provider.

Research conducted by Grant Thornton in 2007 found people in Britain accumulated so much debt it surpassed the entire value of the economy.

This entry was posted on 16/07/2008 at 09:08 am and is filed under Debt. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.

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