Indebted homeowners urged to take action

David Kuo, who is head of personal finance at Fool.co.uk, maintains that a further rise in the base rate of interest could stretch the finances of many British households to breaking point.

It is very important that consumer look at their own finances and identify where they might be able to make savings, Mr Kuo makes clear, but he also notes that there is very little slack left if the typical household budget.

“With almost no contingency left in their budgets, another rate rise, even a small one, could see many homeowners struggling to meet higher mortgage costs,” Mr Kuo commented.

“Homeowners need to act swiftly. It is vital that they revisit their budgets now and identify where savings can be made.”

Including mortgage arrears, the average debt management burden in the UK stands at more than £28,000 per adult, according to figures from Credit Action.