Debt reaching record levels

26-Jun-2007

The amount of income spent by first time buyers and other UK households on servicing debt has reached its highest level for a decade, it has been advised.

The Liberal Democrats have said that information provided to deputy leader Vince Cable in Parliament has allowed them to calculate the new figures, which reveal that personal debt as a proportion of income now accounts for 164 per cent.

This compares to the 1997 figure of 105 per cent and now stands as both the highest ever recorded and the highest in the developed world, the party has suggested.

"Gordon Brown will move house this week while thousands of home-owners face severe financial difficulties because of the expected interest rate rises this summer and later this year," Mr Cable advised.

"When rates rise as expected this summer and probably in the autumn too, many households will not be able to cope," he added.

The news comes as the Office of Fair Trading launches a nationwide campaign aimed at warning young people about the dangers of falling into debt.

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