Debt outlook for 2015 is brighter, but consumers should be prepared for a possible interest rates rise, says Harrington Brooks.
New analysis compiled by leading debt management firm Harrington Brooks predicts that 2015 will be a better year for people in debt. The analysis forms part of Harrington Brooks’ second quarterly snapshot of indebtedness in the UK, Let’s Talk About Debt [pdf], covering Q4 2014.
In general, Harrington Brooks believes that customers should begin to see and experience a marginally brighter outlook and standard of living in 2015. Economic growth is underway and employment is rising, and so consumers should begin to feel that the pound in their pocket goes further and their level of disposable income increases.
Harrington Brooks’ own debt statistics seem to support this trend. From Q3 to Q4 last year, the total number of their customers on a debt management plan fell by 8%, whilst the average debt managed by the firm fell by 15%.
However, despite the improvements, the drop in debt from the Harrington Brooks customer base can partly be explained by the number of Wonga customers being removed from debt management plans, in addition to the upturn in people’s financial positions.
Matthew Cheetham, CEO of Harrington Brooks, said: “We welcome the fact that people’s finances seem to be improving and hope that continued economic growth will make this year better for our customers.
“Though, we remain concerned that there are increasing numbers of people who find themselves struggling with their finances. Our debt outlook for 2015 is one of caution, as thousands of families are financially vulnerable to a potential interest rate rise. To prepare for this rise, we’re encouraging our customers to set clear budgets, prioritise their debts and save more.”
Notes to editors
As one of the UK’s largest debt management companies, Harrington Brooks manages £920m+ of unsecured debts for over 75,000 customers each year and distribute £7.6m to creditors on behalf of customers behalf each month.
It has over 6,000 creditors set up on their system and in most cases, it can contact creditors on the day that plans are fully set up. It typically works to receiving a return response rate of 10 days. In the case of IVAs, 64% of unsecured debts are typically written off at completion.
Let’s Talk About Debt is a quarterly report from Harrington Brooks, designed to give industry participants and consumers a regular and accurate update of the consumer credit market, including information on how well it is working for its customers. Download the Let’s Talk About Debt report [pdf] while the Q3 2014 report [pdf] is also available.
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