Interest Rates and Personal Debt
Interest rates rose once again in the UK on 23 March 2023 by a further 0.25% to 4.25% which can have a major impact on personal finances for many who were already suffering severe hardship.
As well as increases in mortgage payments for those on variable rates, interest on other credit facilities such as credit cards will also be impacted.
Even those on fixed rate mortgages can have further worries as rates and monthly payments could jump significantly once those fixes come to an end and a new deal is sought with much higher interest rates than the previous fix.
Individual Voluntary Arrangement
Here at X-debt, we deal in Individual Voluntary Arrangements
which can be a solution to your debt problems. Please speak to us as soon as possible if you are struggling to meet your monthly commitments.
How Else Can Higher Interest Rates Affect You?
As well as direct cost implications on mortgages and other debts, interest rate hikes can also affect other costs as businesses will suffer higher costs themselves and look to pass those costs on. Interest rates are currently increasing in an attempt by the Bank of England (and other national banks) to reduce inflation by curbing peoples spending power. However, at this time, it could actually have the opposite effect as prices continue to increase as most inflationary pressures are due to increases in energy costs worldwide.
Due to the cost of living crisis, many people are struggling to heat their homes and put food on the table so interest rates aren’t going to force them to spend less as they have none or very little disposable income. It is more likely to push many further in to debt and poverty.
Tenants will also suffer as landlords try to pass on mortgage rate increases by increasing the monthly rent so there are few people who are already struggling, who won’t be further affected.
How Can an IVA Help?
An Individual Voluntary Arrangement or IVA can reduce your monthly outgoings so you only need to pay a single monthly payment on all unsecured debts. The amount you pay will be determined by what you can afford after taking in to account essentials such as food, energy, mortgage or rent payments etc.
Please do speak to us as soon as possible to see if an IVA is suitable for your needs.
If you find yourself in the situation where you are finding it difficult to meet your monthly commitments and paying essential outgoings such as food and energy bills along with other loan and finance commitments, it is very important you seek help as soon as possible.
If you are struggling now, it is likely matters will be worse in the coming months with much of the help towards energy costs ending and interest rises taking effect.
You must act sooner rather than later and try to look a few months in to the future to see where you could be.
Please speak to us to as soon as possible and we will try to help and put your mind at rest. There are options available for most people so please do not suffer in silence as these issues won’t just go away.
You can call us during normal office hours on 0161 787 3400 or alternatively complete our short IVA Calculator