Fool.co.uk has claimed that people who fall outside the non-confirming boundaries face a vulnerable future because of the credit crunch. The website said that consumers needed to take note of the Bank of England’s recent Financial Stability Report, which stated that the UK economy was still in danger from the world credit crisis.
Although there were signs of recovery in the market, adverse borrowers have been warned to be aware that tighter credit conditions may re-emerge. Those identified to be most at risk included those who fell outside of the Bank of England’s ‘defined danger thresholds’, particularly those with debt repayments of more than 55 per cent of their household income, and net worth less than 33 per cent of their income.
David Kuo, head of personal finance at Fool.co.uk, said: “
Consumers should draw up a statement of affairs immediately to get a useful snapshot of their finances. Failing to draw up such a statement in the current difficult climate is tantamount to driving a car without shock absorbers. It may get you from A to B, if you’re lucky, but the ride won’t be nearly as comfortable.”
Brian Murphy, Head of Lending at Mortgage Advice Bureau, commented: “Advisers have to be sure that the advice they give is well rounded as not everyone is fully aware of their circumstances.”
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