The Government must confront “debt bubble” danger

Blog Debt

Ministers should use next week’s Queen’s Speech to address mounting concerns about “unmanageable” levels of debt, experts have warned.

Senior figures at both charities and financial advice firms fear that the number of households facing considerable financial pressures is on the rise and a solution should be included in the new legislative programme.

The situation is being fuelled by unsecured consumer credit, including credit cards, car loans and payday loan arrangements.

Fears have galvanised debt advisors to urge the Government to introduce a scheme which would shield those in serious debt from further interest, charges and enforcement action for a period of up to six weeks.

Peter Tutton, the head of policy at debt charity StepChange, said: “It would be excellent if the Government in the Queen’s speech committed to helping households who are struggling with debt. It really is one of the great problems of the time that politicians have to grapple with.

“We are seeing more and more households struggling just to make basic ends meet – to pay their rent, to pay their council tax, to pay their gas bill. We would like to see the Government say, ‘we need to do something about this’.”

Sara Williams, who is the author of Debt Camel, a blog which specifically advises on money troubles, said: “The recent large increases in consumer credit … look alarming to debt advisers – very much like a bubble building up.”

The Guardian said the Treasury had thus far declined to comment as to whether the issue was likely to be broached in the Queen’s Speech.