The recession, when it finally came was a shock to many people. For more than ten years Britain had been an immediate satisfaction culture, and if you didn’t have the money, well you could always borrow it. There were unprecedented levels of debt in Britain at the start of the recession, as it has continued, people are getting financial advice and consolidating their debts. Now, almost three quarters of British people are trying to settle what they owe and not take on any more debt, according to a recent study.

While most Brits are trying to get themselves out of debt, the twenty plus percent who have taken on more debt since the start of the recession, have done it through one lender rather than several. One of the things that land most people in trouble with debt is that they have borrowed from several sources and are paying interest to each creditor. People use debt consolidation because it means that they only have to make one payment each month and they are only paying one lot of interest.
 

In spite of the fact that most people are trying to ditch their debts and improve their financial health, those people who have lost their jobs in this recession are in no position to do so. The above mentioned study found that the recession had forced nine percent of respondents into debt for the first time. Out of this nine, five percent said that they had just taken out a personal loan for the first time in their lives and the remaining four percent had just taken out a credit card for the first time. Twenty six percent of people in the study said that any spare cash they had at the end of the month was being put towards paying off their existing debts.

The economic climate is changing in Britain and this is evidenced by the fact that the vast majority of people seem to be avoiding any further debt. Those who are taking out credit for the first time should do their research to ensure that they are getting the best deals that the current financial market has to offer.

The high street banks are still reticent about lending, in spite of government attempts to encourage them to do so, and this is having an effect on people looking to buy their first home. It would seem that people in Britain are more concerned about settling their current debt and not taking out further credit, which is much the best thing in the current credit crunch. Even though the position of the pound has improved somewhat, nobody really knows how long the recession will last nor what further effects it may have on people’s lives.