Debt advice due to greedy banks

More Britons face looking for debt advice, after a new report revealed that the cutting of the base rate has not been passed on to consumers.

The Bank of England's quarterly report shows that both secured and unsecured lending rates have stayed much higher than the base rate, since it was reduced to 0.5 per cent last year.

Before the financial crisis, the secured rate was around one per cent above the base rate, but now the gap is closer to three per cent.

This means that consumers with mortgage debt haven't felt the full benefit of the historically low interest rate.

Meanwhile, people with unsecured loans, such as credit cards, have seen their rate rocket to 11 per cent, leading many to seek debt solutions as they try to pay them off.

However, the Bank of England notes that the lenders may not just be building profits for themselves and could be building up their reserves in order to meet new, stricter requirements.

Director of Atlantic Financial Management Kevin Still says, "Whilst there are some signs that personal loans rates are flattening out, the average interest rate on credit card debt continues to rise and is just under 19% APR.

With most UK card holders only paying off the cheapest debt first then they could be repaying card debts for decades on minimum contractual amounts.

A significant percentage of UK cardholders have missed one or more payment in the last year and should be seeking debt advice."

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