Household Debt Rises to £1.5 Trillion

The Money Charity has warned that UK household debt is rising again, after remaining flat for a few years. The average British adult owes nearly £30,000 – in a combination of mortgages, loans and credit cards. And as inflation is likely to rise in the near future, it is recommended that borrowers should reduce their debts.

The BBC reports

“The warning from the charity, which runs training programmes in schools and for adults, comes days after the governor of the Bank of England warned inflation rates are likely to rise to 2.7% in 2017… According to Bank of England figures, total debt rose by £50bn in the past year – or 3.5% – to break £1.5tn. That followed a 2.3% increase the previous year… That is much less than pre-credit crunch growth, which neared 10%, but shows a renewed upward trend after a period of stagnation – after hitting a high of £1.39tn in September 2008, it was five years before the total was back at that level… The charity has been compiling money statistics from a range of official sources since 2005 and publishes them on a monthly basis… November’s statistics reveal that average personal debt rose £1,036 over 12 months to September to just under the £30,000 mark… Some 87% of this debt is in the form of mortgages, secured by property… But UK adults also now owe an average of £3,737 in loans and credit cards… The charity pinpoints rising house prices, low levels of savings and the normalisation of debts as reasons for high levels of indebtedness.”

If you have problems with debt, two impartial sources of help are StepChange and the Citizens Advice Bureaux.