Debt in a downturn: debt management can help
Released
on: November 20, 2008, 10:27 am
Press
Release Author: Gregory
Pennington
Industry:
Financial
Press
Release Summary: With Britain’s high levels of personal
debt, many people are ill-placed to cope with the financial challenges
that may accompany the economic downturn, says debt management
company Gregory Pennington.
Press
Release Body: Responding to recent debt-related comments from
Nick Clegg, Leader of the Liberal Democrats, debt management company
Gregory Pennington
reminded consumers that tackling their debt problems is more important
than ever in an economic downturn.
New
analysis, states the Liberal Democrats’ website, reveals
that personal debt has risen by a total of one trillion pounds
in the past eleven years – a startling ten million pounds
for every hour the Labour government has been in power. Repayments
to that collective personal debt stand at almost £95 billion
per year, or £3,000 per second.
“Much
of that debt, of course, is in the form of mortgage debt,” said
a spokesperson for the debt
management company. “According to the latest figures from
the Bank of England (Lending to individuals: September 2008),
individuals now owe a total of around £1,460 billion – and a full
£1,220 billion of that total is secured against dwellings.”
“Mortgage
debt is still a serious issue, with many homeowners having over-extended
themselves in order to get a foot on the housing ladder. Even
so, taking on a debt to acquire an asset is fundamentally different
from borrowing in order to finance a lifestyle, or to pay for
food, gas or petrol, as many people have grown used to doing in
recent years.
“After
all, the vast majority of non-homeowners still need to make monthly
payments, in the form of rent. In other words, a mortgage debt
needn’t actually add to an individual’s monthly financial
burden – in fact, their monthly mortgage payments may well
cost less than the rent payments they would need to make to live
in a comparable property.
“Even
so, Mr Clegg raises some valid points. Britain’s level of
personal debt is, as he puts it, ‘unrivalled anywhere in
the world outside of the US’, and this can be particularly
dangerous in the context of a global economic downturn. Clearly,
people with higher levels of personal debt are more at risk of
running into severe financial problems more or less as soon as
their income drops. People with little or no debt are, in general,
much better placed to cope with any financial problems they may
encounter as a result of the global downturn.
“As
a debt management company, we specialise in debt management plans
that help people bring their unsecured debts under control. But
debt management is by no means the only way of coping with (and
reducing) high levels of unsecured debt. People with debt problems
may find they have a range of debt solutions to choose from, and
should talk to a professional adviser as soon as possible –
the sooner they do this, the more likely they are to get through
any financial problems that may lie ahead.
“In
the longer term,” the spokesperson for the debt management
company concluded, “we wholeheartedly support Mr Clegg’s
call for financial literacy to play a much bigger part in education.
As he says, ‘maths for life is more important than trigonometry
for most people’ – financial education is clearly
a key part of helping future generations avoid the kind of debt
problems that so many of today’s adults are facing.”
Web
Site: http://www.gregorypennington.com/
Contact
Details: Melanie Taylor
melanie.taylor@gregorypennington.com
0845 056 6480
Pennington
House
Carolina Way
South Langworthy Road
Salford
M50 2ZY
2009
