GBP16bn Rise In Overdraft And Personal Loan Debt

Wed, 16 Jul 2008

The UK’s level of personal loan and overdraft debt has risen by £16 billion over the last twelve months, according to new figures.

Since July 2007, debt acquired through overdrafts and personal loans in Britain has increased from £161 billion to £177 billion, as more consumers are forced to use them to cope with the soaring costs of everyday living.

According to the Telegraph, 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.

In addition, fewer personal loans are being granted as banks continue to tighten their lending criteria, leaving people with fewer finance options, according to Tim Moss of moneysupermarket.com.

Speaking to the newspaper, he explained: "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."

Research carried out by accounting firm Grant Thornton in 2007 found the level of debt accumulated by Brits in 2007 surpassed the entire value of the economy .
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