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| Version 1 | Version 2 |
|---|---|
| Bank of England reports sharp drop in debt 'concern' | Bank of England reports sharp drop in debt 'concern' |
| (about 4 hours later) | |
| A survey for the the Bank of England says there has been a sharp drop in the number of households concerned about their debts. | A survey for the the Bank of England says there has been a sharp drop in the number of households concerned about their debts. |
| In 2013, 39% of households were worried about debt, compared with 46% last year, the report says. | In 2013, 39% of households were worried about debt, compared with 46% last year, the report says. |
| But the Bank warned about the potential impact of future rises in interest rates on borrowers. | But the Bank warned about the potential impact of future rises in interest rates on borrowers. |
| The number of people worried about the affordability of their debts was unchanged from 2012. | The number of people worried about the affordability of their debts was unchanged from 2012. |
| "While debt servicing costs were also broadly unchanged, a significant increase in interest rates at current incomes may increase financial pressure on households with a mortgage," the report said. | "While debt servicing costs were also broadly unchanged, a significant increase in interest rates at current incomes may increase financial pressure on households with a mortgage," the report said. |
| Among households with mortgages, 8% are paying out 35% or more of their incomes on servicing those loans. | Among households with mortgages, 8% are paying out 35% or more of their incomes on servicing those loans. |
| But if interest rates were to rise 2.5 percentage points, the proportion of people supporting that repayment burden would double to 16% - assuming no rise in incomes. | But if interest rates were to rise 2.5 percentage points, the proportion of people supporting that repayment burden would double to 16% - assuming no rise in incomes. |
| The survey showed that the average outstanding mortgage was reported to be about £87,000 and average pre-tax monthly income was £2,701, up slightly from £2,631 a year ago. | The survey showed that the average outstanding mortgage was reported to be about £87,000 and average pre-tax monthly income was £2,701, up slightly from £2,631 a year ago. |
| Meanwhile, the Bank has been looking into the effects that rising interest rates would have on households. | |
| If interest rates were to rise from the current level of 0.5% to a more normal 3%, without any increase in household incomes, it estimated that holders of 50% of UK mortgages would have to either reduce their spending or find more work. |