Posted June 22, 2023
The Money Advice Trust, the charity that runs National Debtline and Business Debtline, has responded to the Bank of England’s Monetary Policy Committee’s decision to increase interest rates to 5 percent, a rise of 0.5 percentage points.
Recent research by the Money Advice Trust shows the challenges facing households which are already under pressure from high prices. Based on a series of UK wide polls, the charity, which runs National Debtline and Business Debtline, found:
- Almost one in five (17%) mortgage holders – equivalent to 2.2 million people – have seen their monthly payments go up as a result of rising interest rates and are now struggling to afford repayments.
- Since March 2022, the number of UK adults who are behind on one or more household bill has risen by 7 percentage points from an estimated 7.9 million (15%) to 11.6 million people (22%).
“Today’s interest rate rise, the thirteenth in a row, will pile more pressure onto the many households already struggling. For homeowners whose monthly repayments have increased, the strain is already starting to show – with one in five saying they are already having trouble affording repayments. Higher mortgage costs also lead to higher rents, making this an incredibly worrying time for many tenants.
“Lenders already have a range of options they can use to help people in difficulty with their mortgage. However, lenders, regulators and government must act to ensure these options, like switching to interest-only for a short period, payment holidays and extending mortgage terms, are readily available to anyone who needs them. This must include giving people flexibility to reverse any changes if and when someone’s situation improves.
“Anyone worried about their mortgage payments should speak to their lender. Help is also available from free debt advice services like National Debtline.”