UK families strangled by interest repayments
Families are paying nearly £200 a month just in debt interest, according to research from the Consumer Credit Counselling Service (CCCS).
This figure equates to 24% of an average household's monthly income and this has risen by 0.1% since the third quarter of 2011.
Demand for debt advice is predicted to remain high in 2012. Wales, Yorkshire and the Humber have seen the fastest rises in demand for help, while London and the North West have the highest demand for counselling.
Older people and those aged over 45 will increasingly be affected by debt problems and the charity predicts its clients in this age group will rise from a record high of 28% in January 2005 to 47.6% by December 2014.
"While debt levels continue to decline, interest payments are a growing burden on too many UK households," says Lord Stevenson, chairman of the CCCS.
Tim Ohlenburgh, senior economist for CEBR Economic Review who helped conduct the research, says: "2011 was a difficult year for many households. The optimism about growth prospects for the UK economy widely felt at this time last year has evaporated and it has become clear that the days of consistent pre-crisis economic growth have passed for a long time."
An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).