British households are at more risk of defaulting on their debts than at any time since the financial crisis, according to a first-of-its-kind analysis of consumer borrowing.
The Times says a sharp increase in mortgage, credit card and loan defaults would raise the prospect of a rise in home repossessions and personal bankruptcies and mark a reversal of seven years of falling debt levels. According to the OBR, every household will be £24,000 further in debt by 2020, amounting to £640bn across Britain in total.
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The UK is "now at a turning point", says the Times, as rising consumer confidence and healthier banks fuel borrowing that, combined with higher interest rates, will put a significant number of people under strain.
While the debt-to-income ratio has fallen since the financial crisis in 2008, a new survey by the Bank of England has shown that borrowing is once again on the rise.
According to a study from Citizens Advice, more than a quarter of a million Britons "live for the day" when it comes to their finances and half sometimes run out of money at the end of the month, which is one of a number of causes of excess debt. It also warned that people don't seek money advice until they reach a crisis point, such as being unable to afford debt repayments, notes The Independent.
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