High borrowing ‘could cause problems in 2008’

The current financial market could have “implications” for those in debt during 2008, warns the Financial Services Authority (FSA).

The FSA has published its Financial Risk Outlook, which warns that the current economic climate could pose problems for those with high levels of borrowing, suggesting that those with problems should seek debt help.

Callum McCarthy, chairman of the FSA, said: “Firms and consumers need to recognise there are both short and long-term risks and should think about the implications.”

The report also warned that there could be reduced confidence in the security of financial institutions, highlighting the importance of becoming debt free as soon as possible.

A survey by MoneyExpert.com shows that one in ten adults in debt are concerned about their debt management abilities, suggesting that up to 3.4 million borrowers may find their finances get out of control.

It was also indicated that seven per cent of those with debts are “very concerned” about their situation.