Personal debt grows six times more than wages

The Bank of England released figures in April this year, that showed that unsecured personal debt in the UK has increased by 6.5% in the last year. Adjusting for inflation, Consumer Care UK has calculated that this means such debt has increased by 27% in real terms since the financial crisis in 2013.

In contrast, over the same time period, real wages (considering inflation) has increased by just 4% and are still lower than before the financial crisis. This means unsecured credit has grown by six times more than wages in real terms.

We investigated how much is owed by the UK population.

These stats show just how much interest is costing the UK.

  • Total interest payments on personal debt is over £50 billion based on April 2019 trends
  • Borrowers paid £139 million in interest a day in April 2019
  • Per household that is an average of £1,849 in annual interest repayments alone
  • Per person that is an average of £967 a year in interest repayments

Annual interest repayments of £967 represents 3.5% of average earnings.

How big is consumer credit lending in the UK?

The amount of borrowing done on credit – but can we afford to pay it back?

  • £217 billion outstanding consumer credit lending at the end of April 2019.
  • Up from £207.1 billion in December 2017.
  • Total credit card debt in June 2019 was £72.7 billion, up from £70.1 billion in December 2017
  • Per household this is £2,653 of credit card debt alone.

To pay back average credit card debt bearing the average interest, at the minimum repayment each month, it would take 26 years and 9 months. 6 months longer than in 2017.

How big of a problem is debt to individuals in the UK?

  • 350 people are declared insolvent or bankrupt every day
  • Citizens Advice Bureau dealt with 2,527 new debt problems every day in the year (May 2019)
  • 15 properties are repossessed every day
  • 1,213 people a day reported they had become redundant between January and March (2019)

If you need help with your debt, please feel free to reach out to us, one of our friendly consultants will call you.

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