All through the financial crisis which began in 2007, the under-performance of the banking industry has adversely affected the entire UK economy, causing great hardship to many trusting customers, who had reposed their faith in the banking system. The rot in the banking system scaled a new peak in 2008, with notable names in the banking industry like HBOS, Lloyds TSB and RBS Group requiring financial packages from the state to bail them out of their predicament.
The billions spent on the bailout package for banks necessitated a slew of austerity measures which had serious adverse repercussions on the general public. In spite of all these all this aid, some banks still continues to make losses while others have not yet been able to regain lost ground.
High rates of inflation and unemployment coupled with a less than proportionate increase in or a stagnant income, has forced people to make up the net shortfall in income as compared to their expenditure, through debt. Servicing this debt becomes extremely difficult in the present circumstances as the people have no surplus income.
Some banks on their part have come forward to help people deal with their problem of cascading debts, and appear to be directing their efforts to make good the damage they had done through their role in the financial crisis.
The customers of RBS and to a lesser extent the Bank of Scotland were the hardest hit and in need of help. The Royal Bank of Scotland has a section on its website for comprehensive debt management. Lloyds TSB have come out with tips to keep debts at manageable levels so that the customer’s capacity to repay the debt is not compromised. However, questions are being raised about the adequacy of these measures, particularly in the case of desperate people caught in a debt-trap caused by the direct or indirect actions of the bank. These people can reasonably be expected to explore all possible options to get out of this situation.
Payplan’s new debt map has compiled data on the level of personal debt across the UK conveniently arranged according to postcode areas. Users can ascertain the average debt level of people in their area as well as the number of people who have approached Payplan for advice. It mediates between lenders and those who are in debt, to find the most suitable and mutually acceptable solutions to debt issues, advising either party whenever required.
This will help many people reeling under debt to know that this situation is not unique to them and to make them more confident in seeking assistance to come out of this financial whirlpool. Banks emulating Payplan’s bold move could stand to gain immensely in terms of customer confidence.