This is largely due to the fact that, unlike those who own their home, people who rent do not have property to fall back on as collateral for secured debt.
However, the bank’s poll found that most people are complacent about the danger they are in and rather than looking for a debt solution, they believe they are experiencing just “temporary cash flow problems”.
“Most of those who reported problems repaying their debts said that this was because of temporary cash-flow problems or because of overspending. Most expected to resolve their debt problems by cutting spending,” said Matt Waldron and Garry Young of the Bank of England’s monetary assessment and strategy division.
Yet 15 per cent of renters classed their loans as ‘heavy burdens’, in contrast to only five per cent of homeowners.
In addition, the bank warned of more insolvencies as it reported a 7.7 per cent rise in debt levels due to low incomes, high energy bills, interest rate rises and domestic shocks like divorces.