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Personal debt soars

Personal debt soars

Category: Money

Updated: 03/06/2010
First Published: 03/06/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
A snapshot of the UK's personal finances has revealed that individuals owe more than the whole country produces in a year.

The combined personal debt owed by Britons ended April at a staggering £1,460 billion, research conducted by Credit Action shows.

Personal debt in the UK has more than doubled over the last decade, according to the figures, and the Citizens Advice Bureau says it is fielding almost 10,000 calls a day from people with new debt problems.

When including mortgages, the average amount owed by each UK adult is £30,228, a figure that is the equivalent to 126% of average earnings. Furthermore, the average debt held by each UK household is £57,915.

Of the 11.1 million households in the UK that have an outstanding mortgage, the average amount owed ended April at £108,809.

Average consumer borrowing on credit cards, motor and finance deals, overdrafts and unsecured personal loans has risen to an average of £4,573 per UK adult as of the end of April.

Figures also show that Britain's interest repayments on personal debt totalled almost £68 billion in the last 12 months, with the average household paying interest of £2,695 each year.

In fact, the average household needs to spend around 15% of net income to service the interest repayments arising from the debts, according to PriceWaterhouseCoopers.

Some £186 million is paid by Britons on interest on a daily basis.

The one silver lining to a particularly gloomy cloud is that the rate at which personal debt is accelerating has slowed considerably over the last couple of years.

In January 2008, it grew by £11.11 a day, whereas today it is growing by just 10p.

If life and circumstance has changed for you recently and you're worried about your own personal debt levels, then visit our Debt Help section where you'll find a list of resources to help give you some peace of mind.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.