Spiralling Household Debt Puts Pressure On Credit Managers

16th February 2018.

The cost of household debt is set to spiral by a third over the next five years, official forecasts have revealed.

It seems that personal finances are due to take a hit as household debt reaches new heights. New figures from the Office for Budget Responsibility suggest households will spend a total of £56 billion managing their debts this year. The watchdog expects this to rise to £72 billion by 2023, in the fastest increase since the financial crisis back in 2008. With interest rates set to increase next year, borrowing is set to become more costly, and consumers are encouraged to look for other ways to reduce their debt.

As household debt piles up, and people start to panic about how next month’s bill is going to get paid, credit management becomes vital. Here at the Credit Protection Association, we help many business owners overcome a towering debt pile. Poorer households make for poorer businesses, with any shifts in customer behaviour leaving many of our retail business members out of pocket.

The current uncertainty of the economy as the country endures prolonged Brexit negotiations has initiated a strong reaction from households, as more have gotten into debt than expected.

Much criticism has been directed at the Government as their ineffectual policies have done little to aid households.

Shadow Chancellor John McDonnell lays the blame on the Chancellor for not “lifting a finger” for the wage crisis and the ensuing effect from inflation. Mr McDonnell insists that what is needed is a cap on consumer credit and fixed real living wages to boost household finances.

The OBR further predicted a significant impact on homeowners, as mortgages, interest rates and house prices increase over the next five-year period.

Debt is debt, whether it’s personal or business, small or large, old or new. It still hangs over your head, and when it builds up, it still impacts our economy and our country’s financial future. It is common practice for many consumers to borrow when they’re in debt, seeing it as a quick exit out of financial distress. Of course, this is not the case and can make matters worse. Credit management and debt recovery services are alternative options that promise to get you out from under that debt pile, rather than merely throwing you in a new one.

Here at the Credit Protection Association, we are dedicated to helping business owners who suffer from bad debt or bad payers. Our debt recovery services plug those holes in cash flow and help our members return to their businesses renewed and revived. Credit management services, whether they concentrate on commercial debt or personal debt, are an efficient way of protecting the finances of the shopper, and the shopkeeper.