Personal debt risk from slow recovery

The slow economic recovery could give millions of Britons financial problems, after new fiscal projections were released.

The National Institute of Economic and Social Research predict that debt caused by additional tax rises and spending cuts could feature strongly in the future. They think that the measures are required to help reduce the burden of the national debt.

The report also reveals that unemployment figures will peak at 2.7 million next year, meaning a further 200,000 people are going to lose their jobs.

With Britons unsure if they will be added to the numbers out of work, they are still being cautious with their spending. This is shown in the projections with a rise in consumer spending of just 0.3 per cent this year, following last year's 3.2 per cent drop.

Kevin Still, director of Atlantic Financial Management says: "It is not surprising that consumers are very cautious about their financial future, especially if they already have debt problems.

"The prospects of income rising or equity growth for homeowners still seems remote. Those that can clear debt are and those that can't may need to take financial or debt advice."

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