UK’s £1.5 TRILLION debt time bomb
We owe a staggering £1.529 trillion in personal debt – the highest level since the financial crisis, new Bank of England figures show.
The most worrying trend is credit card debt which has shot up to a record level with £67.6 billion on plastic.
Debt experts worry how people will cope as rising inflation, a slowing economy and weak wage growth leave households struggling to keep up with essentials, let alone find cash to clear escalating debts.
Charities are bracing themselves for a deluge of people seeking help as a debt time bomb ticks.
Stepchange Debt Charity, which had a record 600,000 people asking for help with debts last year, says the average amount owed per person has increased from £13,900 to £14,251 – the first time the figure has risen in eight years.
Edward Ware from the charity said: “Our research shows that 8.6million people are using credit to cover everyday living expenses, including 1.1million who are resorting to high-cost credit.
“Many people are in low paid and insecure work, they face rising living costs and lack the ability to build financial resilience to help weather any sudden change in circumstances that could pitch them into financial hardship.
“We need a serious debate about household debt in the UK and this election is the opportunity to have that debate.”
After years of people paying off and reducing debt post the economic downturn in 2008, borrowing has steadily increased since late 2014.
Rock bottom interest rates have encouraged people to take on bigger mortgages, personal loans and car finance and to build up bigger overdraft and credit card balances.