Over the past couple of years the situation regarding personal debt in the UK has become increasingly bad, with more and more people finding themselves plunged into debt as a result of a number of factors. The global financial crisis, restrictions in the financial markets, job losses, and the recession have all been blamed for the problems that many people have been facing when it comes to their personal debt levels.

According to industry experts personal debt levels and the number of people struggling to stay afloat financially could get worse over the course of this year, and this is due to the surge in unemployment levels amongst other things. In the last three months to the end of December unemployment is said to have rocketed by 44,000, taking the number of unemployed to nearly 2.5 million.

The coalition government has acknowledged the rise in unemployment, which is hitting younger people particularly hard, but has said that the situation is getting better. Employment Minister Chris Grayling said: “We’ve got a long way to go and I want to see these figures start to come down, but certainly the evidence is over the past month things have settled down and we are not seeing the increases we saw earlier in the last quarter.”

It is thought that a number of other factors will also exacerbate the debt problem. For example, the base interest rate is set to increased over the course of the year in order to keep a lid on inflation, and it is thought that once this happens and homeowners‘ repayments increase many will face increased debt issues and repossession numbers could increase again having fallen over the course of last year according to the Council of Mortgage Lenders.

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