Households and firms across the UK will notice a "debt hangover" as a result of the recession, according to one financial expert.
Andrew Haldane, executive director for financial stability, at the Bank of England (BoE), said the "cushion" that government actions have provided for the servicing of the financial system’s debt was only a "temporary measure" and warned that "they are not a long-run cure".
The expert said a "redesign of debt contracts" would be one way to moderate things should the economy take another turn for the worse.
"If contingent capital became more widespread, banks’ capital ratios would be automatically stabilised over the cycle, lowering the chances of future banking crises."
The credit crunch, which led to a drop of confidence in the financial sector, could encourage a number of people to look at funding their own retirement amid concerns of the stability of some institutions.
Those who are likely to rely on a state pension may look to take out an equity release programme which could ease the financial worried with money taken from the value of their assets.
