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Missed Bill Payments Could Hamper Access To Cheap Loans

Aug 18, 2007
Millions of household bills have been left unpaid over the course of 2007, new research reveals.

According to a study conducted by MoneyExpert, some 7.4 million regular payments for bills on areas such as council tax, mobile phones and utilities have been missed since the beginning of 2007 - an average of 1.23 million a month. The increase in unpaid bills was attributed to constraints on day-to-day finances following two interest rate rises by the Bank of England's monetary policy committee so far this year. Consequently, this could mean that consumers are also struggling to make repayments on various areas of borrowing such as personal loans and credit cards.

Chief executive Sean Gardner said: "It is clear that many of us are under financial pressure. The Bank of England has increased interest rates twice this year with the threat of a third rise during the summer. It was inevitable that once interest rates started rising that something had to give and it is worrying to find that people are missing basic household bills."

However, he warned that those who regularly miss making payments could end up facing "serious consequences". Mr Gardner advised that in addition to being summoned to court, consumers could also damage their credit rating which may hamper their ability to take out cheap personal loans in the future. As a result, the chief executive of the financial services firm recommended that those struggling with debt management should seek professional advice on how to reduce their monthly expenditure. "There are ways to reorganise your finances but missing bills and hoping for the best is not a strategy," he added.

Figures from MoneyExpert also indicated that council tax is the bill which is most likely to be left unpaid as some 1.85 million repayments have either been missed or not made at all over the last six months. Meanwhile, about 154,300 mobile phone statements were reported to be outstanding every month, with three per cent of respondents said to have not paid their gas or electricity suppliers. The announcement about the latter comes despite the financial company reporting that a number of utility providers have reduced their tariffs in recent weeks.

In related news, the Consumer Credit Counselling Service (CCCS) has suggested that both university students and recent graduates alike should plan their finances carefully to avoid debt management problems in the near future. CCCS spokesperson Frances Walker claimed: "You need to budget - it's very boring I know, but you need to budget and make sure that you're managing your money correctly."

She added that those who have just bought their first property soon after leaving university could also develop difficulties paying off secured loans as "they're going to have less take-home pay until their debt is paid off". As a result, they were advised to take the time to research the most competitively priced products available and should "avoid expensive forms of credit like credit cards". Adding that "there are plenty of options out there", Ms Walker also suggested making use of financial comparison websites could help consumers access a cheap personal loan.
About the Author
Abbi Rouse writes for 1 Stop Finance Shop, a one stop, Personal Loans Shop, and more information on bad credit loans and debt consolidation loans available on site.
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