According to analysts at Citigroup, lenders will be forced to write off a total of £6.6 billion for last year, with the figure rising to £7.2 million in 2007, the Times reports.
And because the amount is caused by credit card debt or unsecured loans, banks do not have an “easy claim” on these debts and may only be able to recoup a limited amount, the American financial group maintains.
The claims are echoed by Citizens Advice, which said that the figures vindicate “what we’ve been saying for years”.
Sue Edwards, senior social policy officer of the debt advice group, believes “there is a crisis of personal overindebtedness” and that banks must take some of the blame for this.
Research from The Debt Councillors recently found that over a third of borrowers believed debt and money issues caused problems in a relationship with a partner.