Debt Facts

At present Total UK personal debt broke through the £ONE TRILLION (£1000,000,000,000) barrier in July 2004.  This is just 7 years after it broke through the £500 BILLION (£500,000,000,000) for the first time.

Britain's personal debt is increasing by £1 million every 4 minutes.  At the end of October 2004, the total UK debt was £1.041 Billion.  The growth rate remains strong at 13.6% for the present 12 months.

Total consumer credit lending to individuals in October 2004 was £181.6 Billion (£103 Billion in February 1999), total lending in October 2004 grew by £9.1 Billion.  Secured lending grew by £7.5 Billion in the month and consumer credit lending grew by £1.50 Billion in the month.  Average debt in the UK is £7,000 unsecured and the average owed by every man, woman and child in the UK is approx. £17,000 (including mortgages).

The level of total UK household debt has risen substantially over the past 5 years from 95% to 125% of household’s post-tax income.

Plastic Cards - There are 8 million more credit cards in the UK than people (according to research from data monitor, the firm counted 67 million cards in 2003 compared with around 59 million people in the country and has declared the country officially "addicted" to plastic).  The UK accounts for over 55% of the 155 million credit cards in circulation in Western Europe, having taken overtaken Germany to become the most card intensive country in Europe.

More than half a million people may have crippling debts on their credit cards, MP's were told in October.  The massive problem was revealed when credit card chiefs were grilled by senior MP's.  The bosses admitted that between one and four percent of customers were in severe financial difficulties.  Members of the powerful Commons Treasury Committee - which is probing credit cards charges and marketing - estimated that this meant more than 500,000 people have high balances which they are struggling to payoff.

According to the National Consumer Council one in five people are borrowing money just to pay household bills, and one in four is struggling to meet bills and credit repayments.  Six million families are already struggling to keep up with credit commitments at a time when borrowing is rising.

More than three quarters of Britons are living beyond their means, says a new survey by a leading bank.  A survey by Bradford & Bingley found 38% said their salary was not enough to live on and only 22% said they do not overspend each month, leaving 78% who spend more than they earn.  The research found that 20% said their overspending was due to a "live for today" attitude.

In both a household survey and a survey of CAB client's, the top three reasons quoted by those suffering debt problems, were: 

• sudden change in personal circumstances - resulting typically from job loss, relationship breakdown or illness;
• low income - the consequences of living for a long time on a low level of income; and
• over-commitment - in some cases related to money mismanagement.

Calls to the Consumer Credit Counselling Service (CCCS) help lines have gone up by more than a third to 90,000 in the first six months of 2004.

CCCS client's carry an average of £25,000 in debt, but now many come to the counselling service owing more than £100,000, excluding mortgage debt.

The Prudential estimates that two million pensioners are in financial difficulty.  The average annual income for retired households in the UK is £14,648.  The average drop in income at retirement is £4,164.  2.8 million pensioners are returning to work to meet this shortfall.  The number of consumer debt problems dealt with by Citizens Advice Bureaux has risen by nearly three quarters over the last seven years, figures released today by the national problem-solving charity reveal.  Consumer debt issues seen in bureaux stood at 706,700 in 2003/2004 compared with 405,800 in 1996/1997 - a rise of 74%.  Bureaux dealt with nearly 1.1 million debt-related issues last year, a figure that also includes housing, utilities and benefits-related debts.  But consumer debt is by far the biggest type of debt problem for which people come for help, and it is increasing more than other types of debt problem - by over 35,000 in the last year alone.  The amount of debt being chased by Britain's bailiffs has soared by 70% over the past two years to a record £5 Billion.  The typical household falling into difficulty  owes £25,000, spread across an average of 15 different lenders.  20 million cases have been passed to debt collectors over the past year.