New index reveals debt anguish
Rent, council tax and utility bill arrears often have just as damaging an impact on people as payday loans, according to a new 'harm index' designed to reveal the depth of the stress and anguish caused by debt.28 March 2014
Think-tank Demos, which compiled the figures, is pressing for a traffic light rating system, similar to those shown on food packaging to enable people to weigh up how good a meal is for their health, to be placed on all debt adverts and financial product descriptions.
This information could include, for example, the proportion of borrowers who default on or roll over their original loan, the average amount repaid per £100 borrowed and the risks of not repaying, according to its report, titled The Borrowers.
The think-tank's analysis also estimates that Britons are sitting on around a £5 billion "black hole" of hidden debt, or almost £200 per household, made up of unpaid rent and council tax and overdue gas and electricity bills, which is not included in formal figures.
It said these arrears, which have a "high impact" for consumers, are being ignored in official data.