Double dip recession to further household debts for Brits

Britain is fixed in the longest economic downfall for over a century – fact.

Not even in the days of the ‘Great Depression’ in the 1930’s did Britain suffer for so long in a recession that has now undergone the deepest double dip since 1975.

The first GDP quarter of 2012 between January and March shrank by 0.3%, and the second quarter which we are currently in is expected to see another drop due to the Jubilee bank holidays.

The statistics from recent surveys show that this has affected the majority of the public, with pensioners being the most affected by the current financial climate.

A survey by Age UK revealed that one in five old aged people are in debt to a mortgage, credit card, or a loan.

The survey also exposed the fact that 1.8 million pensioners live in ‘poverty’ and don’t get the benefits they are entitled to because they believe the process was too complicated.

Could this be a case of them not getting the proper explanations of what benefits they can get and it not being made clear because they are of old age?

But it isn’t just the older generations suffering. Over 9,600 repossession orders went through in the first three months of 2012.

Campbell Robb, chief executive of Shelter said:

“Just a one per cent increase on a £100,000 mortgage will cost homeowners an average of £55 more each month, and for many this will be enough to tip them into arrears…”

In April this year the disposable income of households in the UK was at its lowest for the last four years. The research done by Asda’s income tracker showed us that families are feeling restrained when it comes to spending outside of bills and debts. The report afterwards claimed that there is no sign that it will increase in the near future.

And why shouldn’t they be? In the current tough and seemingly worsening economy house prices are falling so people cannot sell their houses for a quality price, there is a lack of people with the money to let property, and mortgage companies are demanding higher deposits and are not offering cheaper interest. Everybody, including businesses and mortgage companies are restraining from losing any amount of money.

The average household debt in March of 2012 stood at a daunting £55,436. People cannot afford to spend, especially when the average income for a family household does not compete with this amount of debt.

The metaphorical debt guillotine is sharpening, and people have limited ways to start saving money. One can only hope for the British economy to begin an incline, but for now people are going to have to weigh up their options, and the coalition need a review to improve the country economy before its too late.

If you are suffering from debt and struggling to keep up with mortgage repayments, and selling your home quickly is the only option, visit the Jemima Poppy website to see what we can do for you.