Interest rates not help debt problems

Households in the UK are still struggling to handle debt problems after a study from the Bank of England reveals low interest rates have failed to help with debt.

Debt worries have increased over the last two years according to the survey carried out by consultancy NMG Consulting, with almost half of households worried about their debt levels.

More than half of those questioned said they struggled with unsecured debt problems like credit cards and personal loans.

When it comes to borrowing, half the people surveyed note that access to credit has become worse.

Despite this, people report being reliant on credit cards despite the rise in rates attached to them, during the last two years.

Debt management expert Kevin Still says "One of the reasons for the findings regarding unsecured debt problems is that there has been no correlation between the base rate and rates charged by credit card issuers, which have continued to rise through the recession.

There has definitely been a divided society between those using low mortgage rates to clear debts and those that are reliant on low mortgage rates to stay afloat financially."

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