Rising prices 'could push people in to debt'
Published On 15 May 2008
The rising cost of food and utilities could push more people into debt, an industry expert has warned.Chris Tapp, director of charity Credit Action, said that inflationary pressures meant that consumers were having to spend more of their income on necessities and added that this could lead to future debt problems.
He was commenting after the BBC reported that research from Capital Economics had shown that the share of household income spent on food, bills and other unavoidable costs had risen from 25 per cent to 31 per cent over the last six years.
Mr Tapp said this could mean more people find themselves in debt and potentially in need of an IVA.
"It could well be that people who need to find that little bit of extra money to get them to the end of the month or pay the gas bill may revert to credit to do that," he explained.
"It may be a reasonable option in the short term, but people have to be very careful they don’t find themselves overly reliant on credit which is unsustainable in the long run and can lead to people getting in real difficulty."
Separate figures from Credit Action indicate that UK personal debt at the end of March 2008 stood at over £1.4 trillion.
