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Newsletter

Rising living costs and static wages make repaying loans difficult

By Sarah Engle, Tue 13 Sep 2011 - Published in Loans

With the cost of living increasing and wages remaining the same, the problem of repaying loans is becoming more difficult for UK families.

This is according to the Debt Advice Foundation, which claims that many people are turning to credit in order to pay bills or for the supermarket shopping because they have fallen into financial hardship.

The organisation noted that if Brits find themselves unemployed or their wage remains static then repaying their borrowings becomes extremely hard.

Managing director of the Debt Advice Foundation David Rogers said: "Loans, credit and store cards that once seemed manageable can all too quickly escalate out of control in the current financial climate."

A report from the Institute for Fiscal Studies (IFS) recently revealed that as the government attempts to repair public finances, household incomes look set to be squeezed for a considerable length of time.

Previous IFS research has estimated that the decline in wages and living standards looks set to continue until at least 2013/14.