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Will household debt really rise by £68bn this year?

According to the Office for Budget Responsibility (OBR), household debt is likely to increase by £68bn this year as people take on more debt to maintain their living standards in the face of high inflation.

Not everyone agrees, however. In its `Market commentary` published yesterday, the Council of Mortgage Lenders (CML) made a few points about this.

Since mortgage lending accounts for about 80% of `financial liabilities`, that figure of £68bn indicates that we`ll see mortgage debt increase by over £50bn this year - and since the CML reckons it`ll increase by just £6bn, this casts some doubt on the OBR`s prediction.

A spokesperson at the IVA Advisory Centre commented: "Predictions like this can`t be 100% accurate, as there are simply so many issues involved. Clearly, demand for credit is a major factor - but so is availability. Many people will see borrowing as a good way of maintaining their living standards, but that doesn`t mean they`ll be able to find a lender willing to lend to them.

"We`d like to remind would-be borrowers that borrowing is something to approach very carefully. We`d also like to remind them that if they run into any problems with their debts, they don`t have to face them alone - getting some advice can really help people regain control of their finances."



The IVA Advisory Centre is a licensed Insolvency Practice, offering expert 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.