In February, outstanding mortgage lending reached £1.3 trillion for the first time. That level is due to increase by almost 50% in the next five years as house prices continue to rise in the UK. The data released by The Money Charity, also revealed that the average personal debt, including mortgage debt, is £29,126. The OBR expects that average debt will increase by 62% by the year 2020, which will mean an average of £47,195 per adult of which £34,124 will be mortgage debt.

Michelle Highman, The Money Charity chief executive said, “With total outstanding debt set to reach £2.5 trillion by the end of the next Parliament, we need to put plans in place to make sure everyone can manage their money – before they get into problem debt. That means well-resourced financial education in schools and support for adults throughout their lives as part of a joined-up strategy for improving financial capability.

“It also means products that support people to manage their money and fair treatment and insolvency options for people who do get into difficulties.”

The Money Charity is calling on political parties to do more to help people gain knowledge in how to handle personal debt or the nation could face a problem.

Ms. Highman added, “Securing financial education initiatives in schools should be an immediate priority for whoever is in Downing Street on May 8th. There is currently no state funding for financial education despite its position on the national curriculum, and the third sector is hugely struggling.”

Homeowners facing the end of their current mortgage deal or those that have already had theirs end and are now on their lender’s risky standard variable rate (SVR) should be aware that currently lenders are competitive for borrowers. They are pushing their remortgage deals to cheap interest rates to gain new customers. This advantageous opportunity should be considered as rates are expected to increase once demand for mortgage lending rises with a boost to the housing market expected later in spring and throughout the summer. Remortgaging has the ability to allow homeowners to decrease their debt levels through lower interest repayments.