including motor arrears, is tracked by the TDX Group Debt Index
which indicates the impact of current macro-economic and credit
sectors factors on creditors’ efforts to collect their outstanding
balances.
It is an amalgam of criteria such as debt burden indicators,
delinquency indicators and wealth indicators.
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Mark Onyett, chief executive of TDX Group explaines that the
Index for Q3 2008 is “the worst position for creditors since the
Index was first collated in 2002. He says: “The index has increased
by 12 per cent between Q2 and Q3 2008 as consumers struggle to pay
their debts (See chart 1).”
He stresses: “A rise in the index reveals that the environment
for creditors to collect their debts has worsened. In Q3 2008 the
biggest factor accounting for the rise comes from the delinquency
indicators, which underline the increasing difficulty experienced
by consumers in repaying their debts.”
Onyett adds: “Over the past quarter there has been a massive 41
per cent increase in the mortgage repossession rate, highlighting
that pressure on indebted consumers has reached unprecedented
levels. Total individual insolvencies have increased by 8 per cent
and IVAs by 7 per cent, reversing a decline in IVA numbers that
started in 2007.”
As well as delinquency rates the index shows a 7 per cent
worsening in the wealth and cost of living indicators. The rising
cost of living is seen through a continued fall in the household
savings ratio to only 0.4 per cent of household income, whilst the
value of secured properties has also dropped by 4 per cent in the
last quarter to their lowest level since the start of 2007. The
only positive news form this quarter is that both secured and
unsecured debt levels have marginally reduced by just over 1 per
cent as creditors tighten their lending criteria (See chart
2)
