Banks and building societies were writing off almost £40m per day in family debts in the second quarter of the year, according to new figures.
A report from the Bank of England found that lenders wrote off as much as £3.5bn of debt between April and June, equivalent to £38.5million per day, the largest amount on record for a single quarter.
Credit card debts accounted for the largest proportion of that figure, with lenders writing-off £2.1bn of debt that they do not expect to see repaid. £1.2bn of the figure was attributed to overdrafts, personal loans and hire purchases whilst just £184m were written-off mortgage debts.
“In a recession, it is inevitable there will be write-offs as a result of people`s financial circumstances changing,” said a spokesman for the British Bankers` Association.
“But, throughout the reporting season, the main banking groups have held the view that the worst of these impairments should be behind us.”
The latest figures from the Bank of England show that consumers took on more debt than they repaid in July.
Between us, we took on an additional £173m of unsecured debt – and £86m of secured debt – in July.
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