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Are personal debt problems being masked by beginnings of economic recovery?

After years of being in the doldrums, there are a few signs that the UK’s battered and bruised economy may be on the jobcentreroad to recovery. Unemployment is steadily going down, while there are a few hints at several major and minor firms wanting to recruit new members of staff. Also, consumer confidence is beginning to return, helped to some degree by the pleasant summer that’s just passed.

However, despite the recent good news for the number crunchers in the City and the Treasury, millions of people aren’t out of the woods just yet. Underemployment, where people aren’t working as many hours as they want or need to, is a big problem, while the cost of living remains prohibitively high for many on low wages in expensive parts of the country such as London.

The debt millstone

Personal debt is something that has become a massive drag for millions in the UK. The reasons for this are many, the most apparent being:

  • Mortgages which have become too expensive to pay off

  • Reliance on short-term or payday loans to plug a short-term gap in personal finances

  • Cheap credit being made available due to low interest rates following the base rate of 0.5% from the Bank of England

All that and more has contributed to a growing number of people struggling to clear their debts asking for help. This debt 935588_paper_money_peopleMap from Payplan shows exactly how many people in different parts of the country have actually come to a point where they have had no other options left when it came to repayment.

Nationwide problem

Whatever the causes of debt may be, repayment is vital in order to avoid further financial pain. While this may sound simple, at a time when incomes are still stagnant for many on modest wages, it’s not easy to meet them without making major sacrifices. If the economy does recover, personal debt will take a while to be eradicated all over the UK, as the map shows.

This is a guest post for TheEmployable

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