UK debt could be ‘£127 billion’ larger than first thought

It has long been known that the UK has a problem with debt. After years of borrowing and over spending, the financial crisis saw many struggling to co…

It has long been known that the UK has a problem with debt. After years of borrowing and over spending, the financial crisis saw many struggling to cope with the mountain of unpaid bills that they had run up.

Now, with growth showing glimpses for the first time in over half a decade, there are reports stating the hard part is over. But for many of Britain's most hardworking people, they are yet to see any real change that will give them the income needed to get back in the black.

In fact, new measures regarding the way in which debt is estimated could mean yet more grim reading for the government – and a realisation for the public of how much of a hole really exists in the country's finances.

The Office for National Statistics (ONS) has announced that it will now read debt according to the standards that are applied by the European Union, which had until now provided a discrepancy, with the UK using its own individual method. The result has led some to believe that there has been some dressing up involved.

Based on the revisions that have been made due to the new system, Britain's current debt level is around £127 billion larger than was first thought, reports the Telegraph. This paints a picture that suggests – despite the smiles on the face of the chancellor recently – we are a very long way from financial safety.

The kinds of amounts that are bandied around regarding our combined debt are so large that they can sometimes get lost in the ether of understanding. However, to put the situation into context, the extra gulf that has been projected by the new EU measures is greater than the coalition's yearly spending on education and housing put together.

Meanwhile, the new system also sheds new light on government borrowing – indicating it to be at £99 billion for the 2013-14 financial year alone, which is five billion pounds more than first thought.

Don't let your debts spiral out of control

Of course, these figures come from an aggregate of millions who have bitten off more then they can chew when securing finance via credit. This can result from a number of reasons, whether it be over-valuation of assets or a business opportunity not turning out as the loanee would like.

But there is help out there, with a host of organisations that exist to help consolidate, rearrange and eradicate debt. Rather than sweeping monetary problems under the carpet and hoping they will simply disappear, expert independent advice is almost always the best option to take.

Investments are all about weighing up cost and benefit in an accurate and balanced way. Although you may think you have more than enough to handle to repayments when taking on a new loan, an impartial view is often the only method of gaining real peace of mind.

Posted by Joe White

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