Personal debt in the United Kingdom now stands at a staggering £1.444 billion as of June 2008. This is an increase of over 7% during the previous 12 months represents an average household debt of £9,309, excluding mortgages. Total secured borrowing against property is £1.212 billion, again an increase of over 7% to in the last 12 months. There is no doubt that debt is rising and the average household now has to cope with approximately £3,800 of interest payments alone each year.
Most unsecured borrowing is made up of bank loans, credit cards, store cards, overdrafts, motor and retail finance deals. The staggering statistics are forecast to increase its 2009. Recent surveys and reports show people are struggling to repay debt at an alarming rate; A survey by moneyexpert.com found that 38% of people were concerned or very concerned about their ability to repay debt. Creditexpert.co.uk found that 1 in 10 of us have no idea how much debt we actually have.
Additional research by Shelter found that a quarter of households feel the cost of running a home is creating stress and depression and that that maintaining the running costs were a constant struggle. It also found that 400,000 households were struggling to keep up with rental and monthly mortgage repayments. The Citizens Advice Bureau, the UK's largest counselling service, reported recently that there has been a 20% increase in debt-based enquiries, equating to just under 7000 debt problems of the day.
Creditexpert.co.uk also found that a quarter of British adults are cancelling their holiday plans this year in order to save money and tighten the purse strings. The statistics show that all types of socio-economic groups are being affected. Student debt is spiralling and for young people are debt culture seem to be the unfortunate norm. Even people approaching retirement have reduced their contributions by an average of £134 a month (according to the Prudential), in order to cope with the increased cost of debt repayment and rising household bills.
The following charts break down total uk debt in 2008:-
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