Total UK personal debt ‘on the increase’

The total amount of personal debt is on the increase, new figures have found.

Credit Action’s latest debt statistics have revealed the cumulative amount at the end of August stood at £1,428 billion.

It means the 12-month growth swelled by 0.9 per cent and indicates individuals now owe more money than what the whole country produces in a year.

Moreover, the write-off rate on consumer lending by monetary financial institutions to UK adults increased further in quarter two of this year to 7.4 per cent.

Building societies and banks wrote off £10.9 billion of loans to people in the 12 months before the end of the second quarter, while in quarter two alone they discarded £3.47 billion.

It means £38.06 million was being written off every day.

Total lending in August ballooned by £1.5 billion, while secured lending rose by £1.7 billion.

Furthermore, a sustained 12-month growth rate of one per cent resulted in total secured lending on dwellings standing at £1,240 billion.

An unchanged annual growth rate of 0.2 per cent also meant consumer credit lending to individuals reached £216 billion.

The report discovered the average household debt in Britain currently stands at £8,590 excluding mortgages.

And this rises to £17,896 if the amount is based on the number of households that have some form of unsecured loan.

But with home loans taken into account, this figure leaps again to reach £56,690.

Recent research from Gocoampare.com revealed many people in the UK are attempting to reduce their expenditure, through such means as home-coking rather than heading out for meals, in an effort to stave off debt concerns.

By James Francis