Britain’s Household Debt Level Tipped to Top £40bn
December 24, 2015
The scale of personal debt taken on by individuals and households around the UK is likely to go beyond £40 billion this year, it has been claimed.
According to the Office for Budget Responsibility (OBR), there is a growing reliance among British consumers on borrowing and credit, which some observers have suggested might soon lead to financial difficulties for many thousands of people.
Taken collectively, British households were effectively running a surplus of £67 billion in 2010 but the intervening five years have seen the UK’s consumers swing back into the red in a big way, the OBR’s latest figures suggest.
The Labour Party has been quick to seize on the figures as evidence that growth in the UK economy is being based on borrowing and many of the same factors that underpinned growth prior to the financial crisis of 2008.
“George Osborne is relying on millions of British families going further into debt to hit his growth targets,” said Seema Malhotra, shadow chief secretary to the Treasury.
“This is risky behaviour from a chancellor whose policy decisions are hurting, not helping, British families. There is a real risk that millions of families will face serious hardship if interest rates start to rise,” she said.
In response to the OBR’s latest figures, former Liberal Democrat business secretary Vince Cable told the Independent: “We’re back on the treadmill of growth being sustained by personal borrowing. Much of it is against an inflating housing stock.
“Taken together with other indicators like the very weak external deficit position, it suggests we’re getting back to the old and unhappily discredited forms of economic growth.”
Figures compiled recently by the charity group Action for Children made clear that Christmas is a particularly difficult time for indebted Scots with most parents around the country feeling the financial squeeze over the festive period.
If you are struggling to maintain control of your personal finances or you are having problems with debt then Scotland Debt Solutions can help. Call one of our experts directly to arrange a free and confidential consultation.