The Bank of England has told banks, credit card companies and car loan providers that they risk fresh action against reckless lending as it warned of a looming “spiral of complacency” about mounting consumer debt.
In its toughest warning yet about the possibility of a rerun of the financial crisis that devastated the economy 10 years ago, the Bank admitted it was alarmed about the increase in the amount of money being borrowed on easy terms over the past year.
“Household debt – like most things that are good in moderation – can be dangerous in excess”, Alex Brazier, the Bank Director for Financial Stability, said in a speech in Liverpool. “Dangerous to borrowers, lenders and, most importantly from our perspective, everyone else in the economy.”
In response to this warning over the surge in personal debt, Craig Simmons at The Money Advice Service comments:
‘As Alex Brazier said, household debt in moderation is not a bad thing. However, when money worries start to become a problem, for example if you find yourself using credit to pay essential bills or falling behind on them, it’s important to remember that you don’t need to deal with it alone.
No matter how big or small you think the problem is, there are experts out there who can help – confidential, anonymous and free debt advice is available across the UK and the debt advice locator tool has all the information you need to make the first step.
Money Advice Service research shows that people who have debt advice feel less stressed about dealing with their finances and sleep better afterwards.’
If you’re struggling with debt, it can be hard to know where to turn. But with lots of free advice services available across the UK, you can find help in a way that’s best for you.
For more information on getting help go to www.moneyadviceservice.org.uk/en/tools/debt-advice-locator or the www.nationaldebtline.org or telephone 0808 808 4000
