- Monday, 8 March 2010The level of debts written off by banks and building societies because borrowers will never repay them has reached a record high in 2009, new figures show.
Lenders wrote off £4.12 billion on credit card debts that will never be repaid during 2009, increasing from £3.2 billion a year earlier, the Bank of England reports.
Total write-offs on lending to individuals reached £9.34 billion last year, up from £6.85 billion in 2008.
The figures represent the effect that the recession has had on consumers' finances, leading to higher levels of personal debt.
Recent research from moneysupermarket.com reveals that five million adults live on their overdraft, and a further 12 per cent are finding themselves in the red five times or more a year.
Head of banking at moneysupermarket.com Kevin Mountford said the situation was a serious concern, with rising inflation only making it even more difficult for people to break the habit.
"The dangers of being overly or entirely reliant on your overdraft are clear; firstly this can be an extremely expensive debt to carry if it hasn't been agreed with your bank in advance, and secondly your bank can reduce the size of your overdraft with little warning," he said.
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