Unsecured Debt Levels Forecast to Go Beyond Pre-crisis Peak
May 31, 2017
The average level of unsecured household debt in Britain will soon exceed the record levels of 2007 and before the financial crisis that devastated economies around the world.
That’s according to newly published analysis by the Trades Union Congress (TUC), which has concerns about what it calls a “living standards crisis” affecting families and individual consumers
across the UK.
Based on data compiled by the Office for National Statistics (ONS), the TUC has said that it expects to see the UK’s average unsecured debt level exceed its current high watermark of £13,300 per
That figure is not much higher than the number for 2016, which put household debt levels at an average of £13,200 per household.
The TUC is convinced that unsecured debts levels are likely to continue increasing for the next several years at least as a result of what it perceives to be an over-reliance on debt and credit among families and working people.
In making its case, the union organisation points out that the average person’s wage packet in the UK is worth £20 less in 2017 than was the case prior to the financial crisis of the last decade.
Worryingly perhaps for people who are struggling to cope with their personal debts, ONS figures suggest that the real value of wages is currently falling.
Taking a broader view, the TUC says it is concerned that the British economy relies too heavily on credit-fuelled spending by consumers and households which are becoming increasingly indebted.
“The surge in household debt is putting the economy in the danger zone,” said the TUC’s general secretary Frances O’Grady.
“We’ve got this problem because wages haven’t recovered. Credit cards and payday loans are helping to prop up household spending for now, but millions of families are running on empty,” he
Responding the TUC’s analysis on household debt in the UK, a spokesperson for the debt help charity StepChange revealed its estimate that around 8.8 million Brits now rely on credit to cover their
everyday household expenses.
If you live anywhere in Scotland and you are struggling to cope with your debt management problems then Scotland Debt Solutions can help. Contact one of our experts directly to arrange a
free and confidential consultation.
Your personal credit score plays an important part in securing new loans and credit, and can affect your financial life for better or worse. Lenders use the information in your credit file to determine whether you present a high risk of default, and if your credit score is low, you may find it difficult to […]
Credit unions offer a range of financial products including current accounts, savings accounts, and loans, and can be a good alternative to banks and building societies whilst also helping your cash flow. There are credit unions all around the UK, almost 100 of them operating in Scotland. They’re not always widely advertised, however, and although […]
It’s a worrying situation when you realise your outgoings exceed your income, and it can be difficult to prevent debt in this situation, but there are solid steps you can take to get back on track – you just need to act quickly. Increasing your income or reducing the money going out are essentially what […]
If you’ve lost your job, state benefits and tax credits can provide vital financial support to see you through this tough time and help you avoid taking on too much debt while you look for more work. As far as your old employment is concerned, it’s important that you check your final wage slip to […]
If you are a Scottish resident in financial difficulty, you may have entered into a Trust Deed in order to restructure debt repayments to creditors. A Trust Deed is a fixed voluntary agreement made between the debtor and creditor, with the help of a trustee. Debt is broken down into smaller, affordable instalments, typically lasting […]
A Debt Arrangement Scheme (DAS) is a government backed scheme which allows you to repay debt through contractual, monthly instalments without the threat of legal action and incurring penalties or interest. The scheme was established in 2004 for Scottish residents in debt, providing an alternative solution to sequestration, the Scottish equivalent of bankruptcy. A Debt […]