WORLD
Soaring UK personal debt wreaking havoc with mental health, report warns
Baku, November 20 (AZERTAC). Personal debt in Britain has reached £1.4tn - almost the same amount as Britain`s national economic output - according to a report that warns debt is wreaking havoc on people`s mental health and wellbeing.
Poorer people are "bearing the brunt of a storm" during which average household debt has risen to £54,000 - nearly double what it was a decade ago, the report by the Centre for Social Justice thinktank warns.
The report, entitled Maxed Out, found that almost half of households in the lowest income decile spent more than a quarter of their income on debt repayments in 2011. More than 5,000 people are being made homeless every year as a result of mortgage or rent debts.
Christian Guy, director of the thinktank established in opposition by the work and pensions secretary, Iain Duncan Smith, said: "Problem debt can have a corrosive impact on people and families. Our report shows how it can wreak havoc on mental health, relationships and wellbeing. Across the UK people are up until the early hours worrying about their finances and bills."
Pond said: "With falling real incomes and increasing costs of basic essentials, many - especially the most vulnerable - are sliding further into problem debt.
The report found that the decision of mainstream banks to refuse credit to the less well off has led to a dramatic increase in the demand for short-term credit - from payday lenders, pawnbrokers and doorstop lenders - which is now worth £4.8bn a year. More than 1.4 million people have no access to a bank account and "are effectively excluded from the entire financial sector". This contributes to the "poverty premium", a £1,280 annual surcharge on everyday goods and services faced by low-income households.