UK far from debt meltdown, says A&L by Finance News Bulletin

Published: 01/11/06

The UK is a extended way from the debt meltdown predicted by some analysts, figures from coalition & Leicester have claimedAs bankruptcies and other debt management schemes such as Individual Voluntary Agreements (IVAs) have hit record take-up levels, some gloomy commentators have predicted that individual debt could cause deep seated imbalances in the UK economyDespite the massive rise in individual borrowing, UK interest tax would have to double before payments became a cause for alarm, said Alliance & Leicesterin spite of the massive increase in personal borrowing, the amount spent by each household on homeowner loan deals, credit cards and mortgage spending stands as 13

8 per cent of yearly incomeThis is in sharp contrast to the last great era of economic upheaval in the UK in 1990, when total spending stood at 257 per cent of annual incomeThanks to near to the ground rates of inflation the average annual mortgage payment is £4,542 every day - almost the same as in 1990 - while average family income has doubled

"Our research shows that although borrowing is higher than in the history - UK households overall are in good financial shape," supposed Chris Rhodes of Alliance & Leicester"Total interest payments consume less than a seventh of family income for those with a mortgage - compared to over a quarter back in 1990"Over the past ten years interest rates have remained quite stable and economists believe there is no genuine prospect of interest rates reaching 85 per cent - the level they would need to reach to reason 1990-level stress," he added

MoneyExpert Limited is authorised and keeping pace by the Financial Services Authority (FSA register No 301654) The Financial Services Authority does not regulate some forms of mortgage agreement,

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