The problem is such that the Financial Services Authority has embarked on a £2m advertising campaign to encourage clients coming off fixes to switch.
An FSA survey has also found that one in five mortgage holders are worried about meeting their repayments in the next 12 months. Nevertheless, a quarter say they have no plans in place to ease the pain of rising bills.
So who’s to blame for this lack of consumer awareness? Certainly not brokers, whose job it is to ensure borrowers get the best deals and no doubt will be chomping at the bit to generate business.
It’s not lenders’ fault either, given that many are highlighting the need to switch. And it’s not the media’s fault because we’ve been drilling the message home too.
To us, remortgaging seems like the obvious solution but we are all involved in the industry so it’s easy for us to grasp the consequences of failing to switch.
We also know how the market works so speaking to brokers does not seem as daunting as it might do to the famous man on the Clapham omnibus.
It comes down to a mixture of apathy and ignorance on the public’s part. This boils down to a fundamental failure on the part of successive governments to include personal finance on the school curriculum so that everyone learns how to manage their finances at an early age.
It’s amazing that general studies lessons in-clude such supposedly vital activities as wine tasting. Why not some fundamental life skills to help prevent the misery of debt instead?
I only learnt the importance of managing my finances after working at Lloyds TSB’s credit card call centre as a student. I witnessed the struggles of those who owed thousands and had little chance of paying off their debts. They were not helped by anything they’d learnt at school.
What hope is there while the government allows this ignorance to continue? There’s still a lack of att-ention to the root causes of debt despite renewed attempts by leading financial figures and consumer campaigns to ensure schools offer financial education.
The Treasury says that up to 750,000 Britons will soon get access to free guidance on financial matters including managing debt, planning for retirement and saving for mortgage deposits. But what about tackling the root of the problem first?
This week, chancellor Alistair Darling will deliver his first Budget in the midst of a spiralling debt crisis and rising repossessions. Now’s the time to start tackling the mess before things get worse.