Personal loans rise ‘highest since before recession’ - Palmers Solicitors

Personal loans rise ‘highest since before recession’

A new overview of the UK’s financial situation have revealed the biggest increase in personal loans and overdrafts since before the recession

The Money Charity said on 8 May that the surge in loans and overdrafts for individuals was the largest since February 2008, according to the latest figures from the Bank of England. Banks increased their non-credit card consumer lending by £1,087 billion in March this year, the largest monthly increase since before the recession.

The rise in total consumer credit, which includes credit cards, was also at its highest in March since September 2012, up by £1.13 billion month on month.

Total consumer credit lending has now increased for 17 months in a row. The total amount of outstanding consumer credit in March was £159.765 billion, the highest level since Jan 2012). Average consumer borrowing – including credit cards, motor and retail finance deals, overdrafts and unsecured loans – per UK adult was £3,184.

Michelle Highman, chief executive of the Money Charity, said: “The fact that we are seeing the biggest increase in personal loans and overdrafts since before the recession could demonstrate a number of different changes in the industry, including an improved willingness to lend by the banks. Whatever the cause, it is important to ensure that whatever you are borrowing, you can afford to pay back.

“Borrowing money, when it’s done in a carefully thought out, affordable way, can make things happen that would otherwise seem impossible or actually save you money in the long run. However if you don’t have a plan to pay the money back, things can quickly spiral into more difficult, unmanageable debt.”

Personal debt and the worry of not being able to meet financial obligations can create real emotional stresses and strains, affecting all aspects of someone’s life.

Professional advice can be a wise investment in helping people to resolve their debt and insolvency issues. Palmers can explore the informal and formal options relevant to individual circumstances and help people make informed decisions about the way forward. For more information, please contact Andrew Skinner.