The annual inflation rate has risen to 4.5% and while the unemployment rate has fallen marginally, those seeking Jobseekers’ allowance went up by 12,400 in April. Kevin Still, Atlantic director believes that the UK is on the threshold of a major rise in consumer debt problems, particularly amongst middle class households and self-employed saddled with large mortgages, loans and credit card debts.
“This is not just a case of more belt-tightening for those struggling to make ends meet,” he said. “For many, the situation is becoming much more desperate. The combination of stagnant income or job losses against increased living costs is driving the perceived ‘comfortably off’ into distinctly uncomfortable territory and debt. Many may be entirely new to the debt recovery practices of leading lenders and their appointed debt recovery and legal agents.
“A rise in interest rates will provide another hammer blow to those already finding it difficult to meet mortgage payments and with predictions of inflation hitting 5% this year due to higher utility bills, it is crucial those in debt seek help before their situation worsens.”
A Debt Management Plan (DMP) can prove invaluable when unsecured debts become unmanageable, according to Atlantic. A new schedule of payments can often be negotiated with all the creditors and will ensure rent, mortgage, energy, critical insurances and council tax bills get paid before other unsecured debts.
