Household Loan Debt Remains Static April 12th, 2012
Household debt is becoming one of the biggest problems for many families and individuals across the UK at the moment. Personal loans, credit card and overdraft debt as well a home owner loans and mortgages are all taking their toll on disposable income levels which are already being stretched by the rising cost of living.
Between February and December last year, the average amount spent on household loan debt fell by around £18.50 per month, excluding repayments on home owner loans, showing that many borrowers were making a special effort to repay their loans and other debts, according to a recent report from Credit Action.
However, by January this year, this pattern had been reversed, with the average level of household loan debt increasing by around £532 and outstanding loan balances only reducing by £3 in February.
The average household debt in the UK now stands at £8,002, excluding home owner loans and debt levels have risen to an average of £56,058, if home owner loans and mortgages are taken into account.
Total debt levels on personal loans, credit cards and other debts stood at £1.457 trillion by the end of February this year, which is almost as much as the GDP of the whole country. This equates to a figure of personal loans and card debts of £4,235 for every adult in the UK.
More and more people are turning to debt charities for help and 318 people are still entering insolvency every day. Thousands of pounds worth of personal loans are written of daily and a property is repossessed every 15 minutes.
Michelle Highman of Credit Action said “Prior to January we’d witnessed an encouraging long term trend of falling average household debt. Unfortunately, since then it seems to have stalled. These developments show the importance of staying on top of your money.”