The Phaserl


Britain is sitting on a new £173 BILLION debt time bomb

from This is Money:

Households are sitting on a £173billion debt time bomb after being lured into a spending splurge by banks and credit card companies.

An investigation by Money Mail has uncovered the startling rise in debt levels due to people splashing out on new cars, TVs, conservatories and home improvements.

But with a rise in interest rates imminent for the first time in more than eight years, fears are growing that many families will be left struggling with repayments.

Bank of England governor Mark Carney has sent a letter to all fund managers asking for reassurance they are able to deal with an anticipated rush of investors making emergency cash withdrawals to cover their mortgages.

Meanwhile, the amount of borrowing being taken on by households continues to grow at a startling rate, spurred on by hundreds of offers for credit cards and loans.

Analysis of debt levels shows the amount being taken out by homeowners remortgaging to pay for an extension hit £477 million between April and June — a five-year high.

The sum owed on mainstream credit cards is increasing by 5.2 per cent a year and has reached £41.4 billion.

Much of this is due to a boom in long interest- free deals, which let borrowers transfer balances from another card or not pay any money on purchases for as long as 40 months.

Estimates suggest the amount the nation owes on credit cards is increasing by £45 a second.

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