Personal debt soars in Britain
NZPA-AAP London
So you want a new car? It’s yours. An overseas holiday? You only have to ask. Update your wardrobe, add to your jewellery collection, buy a stereo — in Britain today there is almost nothing you cannot have, no matter what shape your budget is in. All you do is add your name to the list of Britons who owe £27 billion ($116,102 billion) in credit, excluding mortgages. In a country where the average annual wage is around £lO,OOO it is not difficult for desires to exceed incomes. But it need not be a problem. No longer must you put on your best togs and grovel before the bank manager.
To help the consumer boom along, all you have to do is go into a shop, look interested and before long you will be asked if
you would like an in-store credit card. With London now in the middle of the sales season an extra £2OO or £3OO on the spot is often just the thing you need.
The interest rate can be as much as 40 per cent a year. Almost every chain and department store in Britain offers instant credit.
The figures show that the offer is all too often accepted by those who should not really be shopping.
The retail bosses are calling it the success story of the decade. The lawyers and counsellors handling the resultant casualties describe it as nauseating. In 1982, hire-purchase restrictions in Britain were relaxed and an enormous increase in consumer spending emerged as one of the brightest aspects of the national economy.
At least one-third of all purchases are made on credit and on average every person in Britain owes £5OO.
Figures from the Department of Trade show that of the £7 billion spent in shops during August, £2.6 billion was on credit.
As a result, counselling services have been established to deal with the estimated 500,000 people overwhelmed by their plastic resources. The counsellors say most people fall into debt through unforeseen circumstances rather than mismanagement, but they also blame the highpowered marketing of credit facilities for making it too easy. A national newspaper in Britain recently put the system to the test and discovered that a secretary earning £7OOO a year could establish instant credit for more than £9OOO in one morning at leading London stores.
In some cases, she used as identification a notice from Telecom that her telephone bill was overdue.
She obtained credit from 17 shops ranging from Oxford Street department stores where £2OO was immediately available, to an up-market jewellers where £2500 was offered. A recent 8.8. C. documentary put the case of an unemployed woman with a social security income of £BO a week who had run up debts of £21,000 and complained that there were still shops which would allow her credit.
While some argue that such credit facilities are a natural and healthy progression in the nation of shopkeepers, others see it is an evil which should be banished. Still others see it as temptation being handled in the only possible way, by giving in to it.
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Press, 9 January 1987, Page 22
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521Personal debt soars in Britain Press, 9 January 1987, Page 22
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