Picture Financial: Levels of borrowing in the UK

The gross domestic product (GDP) of Great Britain will hit £1.33 trillion this year, less than the £1.35 trillion which was outstanding on mortgages, credit cards and personal loans in June, according to a report by Grant Thornton.

Julia Dallimore, Marketing Director at Picture Financial comments: “The research issued today highlights that we are a nation of significant credit users, however, many of us use our borrowing as an acceptable means of maintaining our standard of living. Our UK credit levels may seem high but with the vast majority of this taken up by mortgages and other secured lending we are increasingly spreading our credit repayments over longer periods to better manage our monthly finances.

“However, the interest rate rises have seen household disposable incomes stretched and increasingly individuals and families are finding themselves with multiple sources of credit. In these circumstances it is important for people to ensure that they review their credit arrangements and, if necessary restructure their borrowing to allow themselves greater financial freedom each month. This can mean taking the time out to seek independent advice, switching to credit providers with more favourable rates or consolidating all borrowing into one place.

“What is vital when people go through this process is that they get a clear picture of their month by month finances to ensure they can comfortably afford their repayments. In addition, responsible lenders should be ensuring that people are borrowing no more than they can afford to repay as well as allowing a certain amount of ‘financial breathing space’ should the unexpected happen or rates rise again.”