More than half of UK households in debt
More than half of the nation's households have fallen into debt for the first time in UK history, a recent study by Big Four firm Ernst & Young has revealed.
Link: Insolvency firms find work in retail sector
E&Y’s quarterly Retail Financial services monitor, published yesterday, also found a significantly higher proportion of older consumers overcoming their reluctance to take on debt.
The study showed that consumer spending is continuing to mount, despite a drop in disposable income. Philip Middleton, head of retail banking at E&Y, said the trend was worrying.
‘Consumer spending is continuing unabated despite the fact real household income is flat. People are funding their spending habits through higher and higher levels of debt,’ he said
But Middleton added that consumers were beginning to appreciate the need for long-term saving. ‘The perpetual headlines about a “pensions crisis” in the UK are beginning to have an impact on the public, especially if the savings vehicles they are thinking about are perceived as low risk and cash-based, hence the recent success of premium bonds.’
The firm predicted there would be boom in equity release products for both consumption and pension provisions, as upcoming regulation would accelerate around £2trillion in ‘unused collateral.’