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Britain still reliant on debt - Bank of England
The latest figures from the Bank of England show that Britain is still heavily reliant on debt. The total amount of outstanding debt owed by individuals is £1.451 trillion. That astronomical figure can be broken down into two general categories:
• £1.242 trillion of debt is 'secured on dwellings' - this figure includes mortgages, remortgages and secured loans.
• £209 billion of debt is 'consumer credit' - this figure includes credit card debt (£57 billion) and 'other loans and advances' (£152 billion).
While in June we paid back more than we borrowed on secured lending, overall the figures for all forms of lending have been increasing in recent months. Between July and August this year, for example, an extra £500 million was lent to consumers.
A spokesperson for the IVA Advisory Centre said that although the majority of people who borrow money can afford to pay it back, in the current financial climate many may feel forced to borrow money to get by.
"Not everyone in debt has a financial problem, but nonetheless there are a lot of people struggling. In some cases people are relying on credit to meet their day-to-day costs, such as bills. We have spoken to people who have to choose between paying the bills or repaying debt - and rely on borrowing to get by.
"People who are struggling to repay their debts should talk to an expert about the range of debt solutions on offer, such as an IVA or a debt management plan."
An IVA, or Individual Voluntary Arrangement, is a formal agreement between a borrower and their lenders. It involves the borrower repaying as much of their unsecured debts as they can, normally over five years, and at the end of the agreement the remaining debt is written off. According to Insolvency Service statistics, 12,143 people started a new IVA in the second quarter of this year.
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