Skip to content 
Search

Latest Stories

Problem Debt Affects 8.3 Million people in UK: NAO

Problem debt, the inability to pay debts or household bills, affects around 8.3 million people in the UK, said National Audit Office (NAO) in a statement on Thursday (6).

An estimated 4 in 10 people in the UK cannot manage their money well day-to-day, and internationally the UK ranks below average in financial capability.


The inability to pay debts can also increase people’s likelihood of being in state-subsidised housing. The NAO estimates that the increased use of public health and housing services by people with problem debt costs taxpayers an additional £248 million a year, and around £900m a year to the economy as a whole. Due to gaps in the government’s data, it is not possible to model other impacts including on employment and benefits, the report added.

People increasingly report problems with debts to government or utility providers. The NAO estimates that the UK public owe at least £18 billion to utility providers, landlords, housing associations and government, such as through council tax arrears or benefit overpayments.

HM Treasury which has overall policy responsibility for problem debt has limited information on debt in these areas and, as such, does not fully understand the problem, which hinders its ability to respond effectively. The information available is much less clear and transparent than retail lending information.

"Problem debt has significant consequences both for individuals and the taxpayer. While the government has made progress in seeking to address this issue, its attempts so far have been insufficient. The Treasury needs a better understanding of the scale of people’s debt problems and how it is impacting their lives and the taxpayer so it can effectively resolve the problem," Amyas Morse, the head of the NAO.

HM Treasury is also developing proposals to strengthen statutory protections for people struggling with debt problems. The NAO recommends that HM Treasury should ensure its policies on personal debt are delivered effectively and are drawn to best practice. It must also improve the quality and availability of data from across government on the scale, nature and impact of problem debt on individuals and taxpayers.

More For You

Asian firm acquires Kings Court Hotel for £2.75m

UK-based Nanak Hotels acquired the 60-room Kings Court Hotel in Warwickshire for £2.75 million. (Photo: Colliers International UK)

Asian firm acquires Kings Court Hotel for £2.75m

UK-BASED Nanak Hotels recently acquired the 60-room Kings Court Hotel, a 17th-century property in Warwickshire, England, for £2.75 million. This is the first regional acquisition by the privately held firm led by British Indians Harpreet Singh Saluja and Karamvir Singh.

Nanak Hotels, which operates a UK property portfolio, plans to invest in the property's refurbishment and repositioning, according to a statement from Colliers International UK, which brokered the transaction.

Keep ReadingShow less
Priya Nair becomes first woman CEO in Hindustan Unilever's history

Priya Nair (Photo: Unilever)

Priya Nair becomes first woman CEO in Hindustan Unilever's history

PRIYA NAIR has been appointed as the CEO and managing director of Hindustan Unilever Ltd (HUL), effective from August 1. She will be the first woman to lead the company in its history.

The announcement was made by HUL on Thursday (10). Nair, who currently serves as president, Beauty & Wellbeing at Unilever, will take over the role from Rohit Jawa, who will step down on July 31 to pursue other interests.

Keep ReadingShow less
UK business district
The Canary Wharf business district including global financial institutions in London.
Getty Images

Economy shrinks again in May, hitting Labour’s growth plans

THE UK economy contracted unexpectedly in May, marking the second consecutive monthly decline, according to official data released on Friday. The figures present a challenge for the Labour government as it attempts to revive economic growth.

Gross domestic product fell by 0.1 per cent in May, following a 0.3 per cent contraction in April, the Office for National Statistics (ONS) said in a statement.

Keep ReadingShow less
SBI UK cuts mortgage rates

The bank's commitment to green lending reflects focus on sustainability (Photo: Getty Images)

SBI UK cuts mortgage rates

BANKING major State Bank of India (UK) has cut interest rates on its buy-to-let mortgage products to help landlords reduce borrowing costs.

The bank said the rate cuts would help landlords invest in rental properties and meet growing demand for rental homes across the UK.

Keep ReadingShow less