“Household debt – like most things that are good in moderation – can be dangerous in excess.” That’s the message from Alex Brazier, Bank of England’s Executive Director, Financial Stability.
In the past year, outstanding car loans, credit card balance transfers and personal loans have increased by 10 per cent, whilst household incomes have risen by a mere 1.5 per cent.
In a speech to the University of Liverpool’s Institute for Risk and Uncertainty, Mr Brazier, who is also a member of the Financial Policy Committee, said that household debt can be “dangerous to borrowers, lenders and, most importantly from our perspective, everyone else in the economy.”
He warns that high street banks can enter a “spiral of complacency”. As credit becomes cheaper, it’s taken up more widely and is serviced more easily. “Lending standards can go from responsible to reckless very quickly”.
He goes on to suggest that, if necessary, the Bank of England could put additional rules in place which will force banks to take further precautions against the risk of bad debts.
Credit cards, bank loans, overdraft facilities and being in arrears on household bills are all having a huge impact on people’s ability to keep on top of their debt. This is leaving many struggling to meet payments and teetering on the edge of insolvency.
If you are concerned about your finances, our experts at our partner business BM Advisory can help. Whatever your situation, the sooner advice is taken, the greater the range of options that could be available to you to resolve any issues and get you back on the right track. Your initial consultation is free of charge, and you can rest assured that it will be in total confidence.
To find out more or to discuss your specific circumstances, please contact Andy Pear or Mike Solomons.
At Beavis Morgan, we also understand that choosing a finance partner is not a one size fits all exercise. That’s why our team at BM Structured Finance is on hand to match the most suitable products to each individual circumstance, always working together to ensure compatibility and satisfaction.
Contact Simon Belton or your usual Beavis Morgan Partner for more information about how we can help you find the funding you and your business needs to grow and thrive.