UK’s Personal Debt Mountain Grew Again in May

June 27, 2017

The overall scale of personal debts held by UK consumers were growing at an annualised pace of 5.1 per cent during the month of May.

That figure reflects a slowdown in the pace of growth of Britain’s personal debts but still represents a sizable increase in the overall scale of arrears owed to creditors throughout the country.

Official data on the subject comes from the British Bankers Association (BBA), whose members include the leading mainstream money lenders in the UK.

“This month’s figures show that in the run up to the General Election, credit growth in personal loans, cards and overdrafts has slowed, which was reflected in lower spending,” said the BBA’s managing director for retail banking Eric Leenders.

Despite a cooling in the pace of growth within the personal loan, credit card and overdraft areas of the banking industry during May, activity in each of these sectors continued to increase.

Amounts owed on credit cards increased at an annualised pace of 5.5 per cent during May, compared with a figure of 6.3 per cent in April.

Meanwhile, the trend towards a slowing growth rate also saw the yearly expansion rate for personal loans and overdrafts fall from a pace of 6.3 per cent to 4.8 per cent between April and May.

Consumers throughout the UK are facing a squeeze on their personal finances in part as the result of recent increases in inflation, the headline figure for which was recently recorded as being at 2.7 per cent.

There are concerns in some quarters that high inflation may lead the Bank of England to increase its base level of interest rates and add considerably to the pressures on the finances of indebted consumers and businesses nationwide.

According to the BBA, the scale of deposits added to personal savings accounts grew at a pace of 2.6 per cent in the year to May, which is the slowest pace recorded since December 2011.

The association has said that rising costs are affecting households across the country and limiting their ability to set money aside on a regular basis.

If you live anywhere in Scotland and are struggling to cope with your personal debts then Scotland Debt Solutions can help. You can contact any of our offices directly to arrange a free and confidential consultation.

 

 

 

John Baird

Insolvency Adviser

Tel: 0800 063 9250

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