Despite the economies apparent recovery from the downturn, the Bank of England has reported that the financial positions of UK households have remained under strain.
The annual research commissioned by Bank of England surveyed around 2000 UK households, revealing that more than half of the population has been struggling to make repayments on their credit cards and other debts.
Credit commitments actually increased year on year, but only a fraction of those households surveyed reported falling behind on debt and bill payments during the year.
Consumers have been put off spending by the coalition’s austerity budget which has had an impact on everyone’s financial situation in the UK. One in two households believe that their monthly disposable income will be further reduced to a unbearable level in the months to come.
Not only will further government spending cuts cause more financial restraint on consumers, but also increased energy bills, an ever raising inflation rate and the increase of VAT to 20% and will all leave UK households struggling to keep up with repayments in the future.