UK households falling deeper into debt
UK households will find it increasingly difficult to service their debts in the coming years, according to a report by debt charity, Consumer Credit Counselling Service (CCCS).
According to the charity’s research, an average of more than 23 per cent of households’ disposable income went towards interest payments on loans at the end of 2011.
Although interest payments fell by £2 per week in the final quarter of 2011, inflation caused the cost of living to increase, further reducing disposable income for UK householders.
The CCCS warned today that the outlook remains difficult despite a recent fall in inflation because of an expected increase in unemployment.
The CCCS expects middle-aged and elderly people to be particularly prone to debt problems, with people over the age of 45 expected to account for 47 per cent of its clients by December 2014, compared with 28 per cent in 2005.
There was bad news for younger people too today, with a survey predicting that the rising cost of childcare could make it too expensive for parents to go to work, pushing more families into poverty.
According to the Daycare Trust charity, the average cost of a part-time nursery place for child under the age of two-years is more than £100 per week.
This is an increase of 6 per cent compared with childcare costs for under-2s in 2010.
However, average wages increased by just 0.3% over the same period.
The charity also highlighted that 44,000 fewer families are able to claim tax credits to pay for childcare following recent changes by the government.
Families who are still eligible to claim the tax credits are now receiving an average of £500 a year less.
In October the government announced an investment of £300m to help families on low incomes with childcare costs, through the introduction of the Universal Credit.
It is also investing more money into early years and nursery education.