Personal Loan Debt Continues To Increase
The credit crunch and recent recession has caused many individuals to rethink their finances and in particular reduce their exposure to debt and reliance on loans, credit cards and overdraft facilities.
But despite the fact that many people are reducing their borrowings and paying off their loans early, new figures have revealed that personal debt through personal loans, credit cards and overdrafts in the UK has reached yet another record level.
According to new research from Credit Action, the total amount of personal debt on loans and other credit in the UK has risen to a staggering £1,460 billion by the end of April this year.
To put this in some form of perspective, this figure is more than the total Gross Domestic Product (GDP) for the whole of the UK in a year.
According to the figures, the average debt per person in the UK is around £30,228, including home owner loans and mortgages, which works out at 126 per cent of the average earnings in the country. Also the average household debt has been calculated as being around £57,915.
Excluding mortgages, the average amount owed by each individual in the UK on personal unsecured loans, credit cards, overdrafts and other types of credit stands at £4,573.
The total amount of interest payable on loans and other debts for the twelve months up to April was £68 billion, which equates to £2,695 per household per year. In total, consumers in the UK pay around £186 million in interest every day!
If there is any good news to be taken from these statistics, it is that the rate of growth of debt is actually slowing, with the rate of growth of personal debt growing at just 10p per day compared with £11.11 per day in January 2008.
