Average Debt now £13000
UK families average £13’000 debt
As if things aren’t bad enough for UK families, it has now been estimated that we have on average a household debt of around £13000 per family! That doesn’t even include your mortgage says the TUC (Trade Union Congress) the Voice of Britain at Work, who gets its scary figures from the Office of National Statistics (ONS).
Student Loans are included in this figure and this is because of the sudden increase of students loans over the past few years and so has a dramatic effect on household debt. Frighteningly, the ONS state that the total unsecured debt of the UK is a whopping £348Bn, whilst the Bank of England (who state that they are not worried about this level of debt) do not include Student loans in their figures and estimate a staggering £192Bn. Wow, a lot of student debt then it seems! Students themselves face financial issues in the future with some expecting to leave University with their qualifications and an eye watering £40’000 worth of student loans debt according to a House of Commons paper.
But even disregarding student loans, this unsecured debt also includes credit cards, loans and loans for car buying, with other ways of borrowing such as store cards and overdraft adding to the amount.
The Bank of England go on to say that the level of interest rates still remain relatively low and they expect for this to remain where it is for the foreseeable. Although they also add that national debt and household debt remains on their watch list, something that is expected but slightly worrying in my book.
Should we all be worried? Can we cope with our debt levels with many households struggling post recession and even post Brexit announcements mid last year and expectations that 2017 will also be a hard year financially for many families. Some may even find that they cannot make repayments on their borrowings and end up in sticky situations especially at a time when jobs and finances are unpredictable.
So have we really borrowed more recently compared to previous years?, well yes according to the TUC who claims that borrowing in terms of unsecured loans as a percentage of all household income is the highest it has been in the past 8 years and has reached over 27%. What has caused this sudden need to borrow, can it all be over spending and keeping up with the Jones’s? Not so say the TUC, low growth in the average wage compared to the rise in living costs has meant that many families have been reduced to borrowing as a means of making ends meet.
With all good intentions I aim to keep my finances securely within tight purse strings this year however with living costs always on the rise can we really continue to cope financially.