17 March 2005
Consumers in Britain are not taking full advantage of the current economic viability of loans despite soaring levels of personal debt in the UK, according to research by a City investment bank.
The UK debt mountain soared above £1 trillion last year but a new study from Dresdner Kleinwort Benson has concluded that people are borrowing less than their "optimum" level which is therefore likely to prevent the nation's financial problems being solved.
Financial experts James Eden and Simon Maughan are quoted in the Guardian as acknowledging that after the Dutch, Britons are now the most indebted people in the world, narrowly ahead of both the Americans and Australians.
But an increase in personal secured loan activity could help improve this situation where debt servicing costs now account for just 6.8 per cent of disposable income, according to the report, partly due to a drop in interest rates in recent years.
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