Significant spike in personal debt levels
According to Credit Action, between August and September this year, personal debt rose £52 pounds.
Although there was a small increase between the months of February and March (£5), the rate of personal debt has otherwise continually decreased month-on-month since September 2011.
Michelle Highman, CEO of Credit Action said: “During the period between September and August, we saw that unsecured debt rose along with secured debt (mortgages) for the first time since March 2012. Lending of any kind can be both a blessing and a curse to our economy and to individuals.”
Generally, secured (mortgage) lending and unsecured lending (smaller personal loans) follow opposite trends but between September and August 2011, they rose together.
Such a significant increase may be the beginning of a reversal of the recent consistent downward trend.
Highman added: “The surprising increase in unsecured lending, in particular, might suggest that people are feeling more confident about their finances and therefore spending more accordingly.
“But on the other hand, as with all borrowing, there is a risk of too much unsecured debt being taken on and it becoming unsustainable. If your debts are getting unmanageable, seek free and independent advice.”