One of the UKs most popular money saving websites, VoucherCodesPro.co.uk, has released details on the levels of debt for people in the UK. This is highly interesting information, as it shows people continue to struggle financially. While this could be a sign of economic recovery, showing that people have more confidence in the market and their employment status, it can also be a sign of a new crash.
A new piece of research completed by money saving website VoucherCodesPro.co.uk has today revealed details about the levels of debt for the average person in the UK. The information provides a fascinating insight into the habits of people, as well as the difficulties they face in their daily lives. This information, in turn, can be used to create better support systems for those who are in difficulty, as well as allowing economic forecasters to make better predictions about the future of the UK economy.
The data revealed a number of interesting points, including:
- Outstanding debt nationwide stood at £1,460 trillion, which is a £29 trillion rise year on year.
- Outstanding secured lending, meaning mortgages, stood at £1,292 trillion. This is a £19 trillion rise. Forecasters see this as a positive development, as it means the housing market is showing signs of recovery. Others disagree, feeling it is a sign of people borrowing on the equity in their property because they are failing to make ends meet.
- Outstanding unsecured lending, which is consumer credit, was £168 billion. This is a rise of £9.5 billion. It is not clear whether this means people feel more confident about lending again, or whether it means their financial situation is getting worse and they have to resort to lending.
- The average household debt in the UK, not counting mortgages, was £6,359. This is a rise of £106 year on year.
- Including mortgages, the average household debt in the UK is now £55,286, a rise of £68 year on year.
- The average amount each adult across the UK owed, including a mortgage, was £28,916. However, this is a heavily skewed figure due to disparities in house prices across the country and due to the number of people living in rentals. The debt of £28,916 equals 115.3% of average earnings.
- Consumer borrowing, on average, is £3,326 per adult, which includes finance deals, credit cards, unsecured loans and overdrafts.
- There are currently 11.1 million outstanding mortgages, with an average balance of £116,167.
- Interest repayments over a 12 month period in total have been £55.5 billion, which equals £152 daily. As such, the average payments in interest alone for each household in the UK is £2,100.
- Banks have started to lend more to individuals again, rising by £83.9 million per day.
- Around £3.45 billion in individual loans have been written off by the banks.
“The statistics are fascinating”, says a spokesperson for Voucher Codes Pro. “They show that people are once again getting into significant personal debt, even if it is rising more steadily than before. What it doesn’t show, however, is why this is happening. There are different arguments for this, and it is not clear which side is right.”
“The first camp claims that people are borrowing because they are secure in their job and they know that the economy is recovering”, adds the spokesperson. “The other camp believes that people are borrowing because they are in such great financial difficulty that they see no other way out. In reality, with the rise of payday loans and the Wonga and PPI scandals, it is likely that the latter camp is closer to the truth.”