Many people across the UK have seen their wages either frozen or even cut over the past couple of years, despite the fact that living costs and inflation have soared. These days, consumers have to make their wages go much further than they had to in the past and according to some officials this could result in a huge problem with person debt over the next couple of years.
Stagnating wages compared to soaring inflation could be contributing to problems in repaying existing debt as well as with issues relating to taking out fresh debt, all of which is set to culminate in UK households having more than £2 trillion worth of debt by around 2015. Many basic and essential living costs have soared whilst wages have failed to keep up with inflation, which includes the cost of petrol, food and energy usage.
Many people who already have debts are finding it difficult to keep on top of repayments or pay anything more than the minimum amount required due to their financial situations. Many others have been forced into taking out new debt as they have had to borrow money in order to stay afloat financially because they have been unable to make their wages stretch far enough. Some may be forced into opting for solutions such as insolvency over the coming year or two, as their financial situations become worse, particularly if the base rate increases and their mortgage repayments shoot up.
Tags: mortgage repayments, petrol, finances, energy usage, financial situations, insolvencyAn official from a union said: “As wages have stagnated, debt has soared. As incomes are squeezed further, the Office for Budget Responsibility expects household debt in this country to reach over £2 trillion by 2015 – an albatross around the neck of our economic future.”
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