Household debt hits £7,900
The average family in the UK is £7,900 in debt, according to new figures from the Telegraph. Analysts say that UK families carry the most debt of any country in the world. The figures hardly come as a surprise at a time when many people are cautious of making or unable to find financing to pay for big purchases.
Credit cards are expected to fall out of fashion with the rise of digital payment methods and payday lenders as the preferred way to spend. Credit cards account for the largest type of debt in the UK. The figures exclude mortgage repayments.
Regional Household Debt
Regionally, household debt is highest in the East Midlands with an average outstanding balance of £9,420.63. The area with the lowest household debt is the North East, with an average household debt of £5,750.00 per household.An interesting figure considering that unemployment in this area remains the highest in the UK with 12.6% of people accounted for as out of work.
The 24-34 age group are identified as the biggest borrowers as they use credit cards to fund ‘essential’ purchases. Although house prices may be starting to fall, mortgage lenders are still very wary about lending to the first time buying demographic.
Household Debt Up And Savings Down
Average savings are down, with most families being able to afford to put aside only £22 each month. Although methods of spending and saving are changing, some think that this is not for the better. The Office of Fair Trading is due to investigate 50 payday loan firms who target low income borrowers and make their profit from huge APR rates. These firms encourage household debt by making it easy to borrow money when the banks will not lend.
If you find yourself in debt and facing a bad credit rating, there are methods of getting your finances back on track. One of the first steps many people take is to sign up for a special bad credit card debit that will allow you to rebuild your credit through making small repayments.
If you have recently noticed your household debt has risen and you are saving less money each month then let us know your thoughts of how you have taken control of your rising household debts and what worked for you.