Household debt in the UK has spiralled over the last few years. According to research from an accountancy firm PwC, the average figure of unsecured debt that an average household owes will be approximately £10,000 by the end of 2016. So what has caused this?
- Research shows that borrowing on credit cards, personal loans and overdrafts has grown by nearly £20 billion to £239 billion in 2014, an average of £9,000 per home. PwC financial experts stated that “the increase is the fastest rate of growth in at least a decade, with £9.1 billion (46%) made up of student borrowing, £4.2 billion (22%) from credit cards and £6.4 billion (32%) from other borrowing.” They believe this will be a trend that will continue over the next two year period with a growth of between 4-6% annually.
- If an interest rate hike should occur then this could overstretch many households making them vulnerable to the management of their debts. The report adds that a 2% increase could mean households would have to find approximately £1000 a year on top of their current outlay just to cover the additional interest costs.
- The YouGov survey noted that one in three people go into debt over the Christmas period. Loosing track of spending when trying to fund the extreme costs of Christmas have terrorised the bank accounts and credit cards of many people in the UK.
- The Banking software company ‘Intelligent Environments’ commissioned this survey and found that “Britons aged between 25 and 34 struggled the most with money, with 64% facing debts or arrears of some kind.”