Calculations by The Money Charity show for the first time that private debt has topped £1.5 trillion [1]. The average adult in the UK now owes almost £30,000, or 113.3 per cent of average annual earnings.
Over the 12 months to September, this figure has grown by £1,036.58 and it is expanding at the fastest rate since before the financial crisis in 2008.
87 per cent of this debt is mortgages, so is secured against property. But the 51 million adults in the UK also owe an average of £3,737 in unsecured debt like credit cards and personal loans.
Commenting on the findings, Michelle Highman, Chief Executive of The Money Charity says: “When we see these record levels of debt, it’s important to remember that there is nothing necessarily wrong with borrowing. It is a good way of paying for things you can’t afford up-front like university or your house. But with interest rates so low at the moment, it’s easy to think that high levels of debt are manageable”
“On Thursday Mark Carney claimed inflation will rise to 2.7% next year. More inflation means higher interest rates, which we’ll all have to pay on our mortgages, loans and credit cards. If you’re in debt, particularly if you have a variable mortgage, it’s time to prepare by taking control of your finances.”
If you have any concerns about your personal financial situation, our partners at BM Advisory are available to assist.
As specialists in providing restructuring, recovery and insolvency solutions for businesses and individuals, we understand the issues that can impact on business performance and success, and find innovative solutions for businesses and individuals in distress.
If you would like to have a confidential discussion about any aspect of your personal financial situation or that of your business, contact Andy Pear or Mike Solomons at BM Advisory. Your initial consultation will be free of charge and without obligation, and we will discuss your individual situation and advise the best course of action. Alternatively, please contact your usual Beavis Morgan Partner.
[1] Click here to read the monthly Money Statistics in full.