Rising costs and increased interest rates creating a “perfect storm”
The Bank of England Monetary Policy Committee has today voted to increase interest rates to 3 percent, a rise of 0.75 percentage points.
Research recently published by the Money Advice Trust, the charity that runs National Debtline and Business Debtline, shows that one in five (22%) of UK adults said they were worried about the cost of their mortgage given rising interest rates.
As rates rise to the highest level in decades, and costs continue to escalate across the board, the charity warns that many face serious financial difficulty ahead.
Money Advice Trust chief executive Joanna Elson CBE used an appearance before the House of Commons Treasury Committee to warn of a “perfect storm” facing household finances.
Jane Tully, director of external affairs and partnerships at Money Advice Trust, the charity that runs National Debtline and Business Debtline, said: “Household finances are facing a ‘perfect storm’ of both the damage done by high inflation, and now higher mortgage payments and rents, as landlords pass rate rises on.
“For millions of mortgage payers, the impact of recent rate rises are yet to be felt – meaning the worst is yet to come. Action is needed now to help people who are struggling.
“The government must urgently reform the Support for Mortgage Interest scheme to bring down the 39 week wait for support to 13 weeks, and extend eligibility to ensure support reaches people who need it.
“Early intervention is also crucial, and lenders need to be proactive in offering support to customers worried about their repayments.
“Anyone worried about their mortgage repayments should contact their lender as soon as possible. You can also contact a free debt advice service like National Debtline or Business Debltine, who will be able to take you through your options.”