‘Stark’ personal debt situation revealed in the UK

The average household in the UK owes almost £55,00 in debts.

This is according to the latest set of statistics from The Money Charity, a body that produces monthly summaries of the financial situation facing Britons. With the daily amount of interest paid on personal debt in November now standing at £163 million, it's clear action needs to be taken. 

Between August and October, 1,315 people were made redundant every day, which will have put tremendous stress on their finances. Indeed, if these individuals did not have a rainy day account, they would have been forced to take on unsecured lending in an effort to make ends meet. 

Worryingly for consumers, the rate of credit card purchases is still eye-wateringly high, as nearly £1.5 billion was spent daily during October. People should only be using their credit card if they are confident they can pay it off every month, or else they will incur some hefty interest charges. 

Overall, outstanding personal debt stood at £1.432 trillion at the end of November, which represented a slight year-on-year increase from £1.42 trillion 12 months previously. This demonstrates how the situation is getting worse instead of better. 

In terms of the average amount owed by UK adults, including mortgages, this figure is now at £28,528 – it represents 115 per cent of average earnings. Taking November's figures into account, the total interest repayments on personal debt over a 12-month period were £59.4 billion. 

These figures make for bleak reading, as they highlight just how serious a financial situation some consumers find themselves in. Of course, if households have racked up significant arrears, seeking out debt management help is the best course of action. 

By taking out a debt management plan or an individual voluntary arrangement, people can regain control of their situation and structure their repayments in a manner that is more reasonable for them, typically freezing any additional interest in the process too.

By Amy White