Household Debt Continues To Rise

Britons now owe more money than the value of the entire country’s annual produce according to the latest figures from Credit Action. Average UK household debt including mortgages, is now £58,083.The typical adult owes £30,328 including repayments on their home - 132% of average earnings.

Total lending grew by £2.1 billion in February, down from an increase of £8.4 billion the month before. Secured lending was £1.6 billion higher, while consumer credit lending through personal loans and credit cards was up by £0.5 billion. Overall consumer credit lending stood at £225 billion.

Interest payments on all personal debt totalled £68.4 billion in the year ending in February, with each household paying an average of £2,716 in annual interest on its borrowings.

This means that the average family has to spend 15 per cent of its total income purely on meeting interest payments on the debt, according to research by PricewaterhouseCoopers.

David Rodger, Managing Director of Debt Advice Foundation comments: “The most worrying aspect of these latest figures, which show that Britain remains deeply in debt, is that many people are going to be tipped over the edge when the inevitable increase in interest rates happens.”

“The industry needs to be preparing itself for the inevitable surge in demand and consumers need to start planning ahead now and deciding whether they could continue to afford their variable rate mortgage payments if they were to increase substantially."