UK families strangled by interest repayments

carrying debt

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.

Rising prices of key essentials such as, petrol, utilities and housing, combined with high inflation and low wage growth have compounded the nation's debt problems. 

Debt advice

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."

More about