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Unsecured debt dropped in April

The latest figures from the Bank of England have revealed that UK residents ended April carrying £136m less unsecured debt than they had at the start of the month.

According to the `Lending to individuals` report, net credit card lending actually increased by £168m, but `other loans and advances` fell by £303m as people repaid their debt more rapidly than they took on new debt.

Secured debt, on the other hand, increased by £490m. (It`s actually very rare for the amount of secured debt to drop - when it fell by £332m last July, this attracted a lot of commentary.)

49,871 mortgages for house purchase were approved in April, slightly higher than the figure of 49,008 in March, but still below the previous six-month average of 53,098 - and well below the figures of 110,000 to 130,000 which were common back in 2006 and 2007.

"It`s encouraging that people are still focused on repaying their debt," said a spokesperson for the IVA Advisory Centre. "The recession came as a real shock, causing many people to take a good look at their finances and start doing whatever they could to pay off their debt and improve their financial situation.

"Looking at the latest insolvency statistics, we see that there were 35,682 personal insolvencies in England and Wales in the first three months of the year - 18,256 bankruptcies, 11,782 IVAs and 5,644 DROs [Debt Relief Orders].

"So the Bank`s lending figures are good news - the more people focus on repaying their debts today, the less likely they are to end up adding to those insolvency figures in the future."

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The IVA Advisory Centre are a licensed Insolvency Practice, offering free debt advice as well as IVAs and a comprehensive range of other debt solutions. If you are in debt and would like to explore your options, contact one of our advisers today.