The rising costs of borrowing are having an impact on the household finances of the millions of people dealing with debt management difficulties in the UK, according to the Consumer Credit Counselling Service (CCCS).
Many people will feel the financial pinch caused by rising interest rates when their fixed-rate mortgage deal comes to an end and for many this will mean having to cut back on other expenditures, the organisation insists.
When it comes to the so-called credit crunch, the CCCS suggests that it could eventually lead to an increase in the number of people entering Individual Voluntary Arrangements (IVAs), but it is believed to be too early to predict whether this will be the case.
“The thing with insolvency is that it takes quite a long time for the debt levels to build up before people have to declare themselves insolvent,” said James Ketchell from the CCCS.
“In general it is hard to tell how the credit crunch is going to affect people in this way but it is going to be more difficult for people in the future.”
Earlier this year, the CCCS reported that the burden of debt management in the UK is increasingly shifting to more elderly generations.