Personal debt levels in Britain could mean that consumers in the country find it difficult to return to a positive economic state, it has been suggested.
According to Peter Sargent, president of R3 – an insolvency trade body – the UK could be left lagging behind countries such as France and Germany if people fail to pay off their most expensive debt and continue borrowing.
He likened the debt levels in the country to a “ball and chain”, adding: “What seems to be happening is that people are borrowing on their credit cards and paying off mortgages, which is wrong because credit card debt costs more to service.”
Mr Sargent’s comments follow research by moneysupermarket.com, which revealed that although more people are paying off non-mortgage debt, over a quarter of people are taking on more debt.
The report also found that 14 per cent believed that debt would always be part of their lives.
By Sarah Adie