The Independent reports that average household debt is now £54,000 - double the level a decade ago, despite record low interest rates, and ministers fear that failure to pay back loans and credit will leave thousands at risk of losing their home.{jcomments on}
The Centre for Social Justice (CSJ) think tank, founded by Iain Duncan Smith in 2004, published it’s study “Maxed Out” and in it warned that two of the flagship policies he is implementing as Work and Pensions Secretary - the “bedroom tax” and universal credit - could plunge more people into debt.
It revealed that more than 5,000 people are already being made homeless each year because they cannot pay their mortgage or rent.
Despite the return to economic growth, personal debt in the UK totals £1.43 trillion, close to its all-time high. Average household debt stands at £54,000 - almost twice the level a decade ago.
Although much of it stems from mortgages, the report warned that poor people were hit hardest as unsecured consumer debt almost tripled in the last 20 years to nearly £160bn.
Although the CSJ backed the principle of the “bedroom tax” imposed on tenants in public housing, it said the “spare room subsidy” should not have been removed unless they had refused a “reasonable offer” to “downsize” or work longer hours.
It warned there had been “genuine confusion” about the impact of the change and discovered that some local authorities are failing to fully allocate their share of the £25m set aside for discretionary housing payments.
There was evidence of some “property swaps” being put on hold until tenants had paid off all their rent arrears, which risked more debts piling up.
Read the full news article here
Thanks to Pre-Raphaelite Sister for spotting this for us
