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UK heading further into debt

Written by Gary Howes

Thursday, 18 September 2008

Fairinvestment.co.uk reports massive increase in personal debt despite crunch.

With the markets sobering up to the implications of years of easy credit new research shows that personal debt is still on the increase.

Fairinvestment.co.uk has shown that borrowing is set to soar as consumers look to plug the gaps created by lifestyles that have over the years been built on credit.

Total unsecured lending stood at £215billion in August 2007, and this figure looks set to have grown considerably over the last year as Brits contend with a credit crisis and looming recession.

Average consumer borrowing via credit cards, motor and retail finance and unsecured personal loans stood at £4,524 per UK adult at the end of August 2007 according to Credit Action.

However, new figures from Fairinvestment.co.uk show that this amount has soared by 30 per cent year on year to the end of August 2008.

The Fairinvestment.co.uk survey of more than 2,000 UK residents has found that the average combined credit, store card and personal loan debt now stands at £5,886, more than £1,000 higher than the average recorded at the end of August last year.

This is an increase of 30 per cent, which if applied to all unsecured UK debt (http://www.fairinvestment.co.uk/debt.aspx) at the end of August 2007*, would make a new total of £279billion. The results of the Fairinvestment.co.uk survey show that the average store and credit card debt stands at £2,076 and the average unsecured personal loan debt is £3,810.

Gender and age

When it comes to borrowing, the research has shown that women are more restrained than men, with an average personal, unsecured debt of £5,404, compared to men's £7,172, meaning men owe 33 per cent more than women on average.

The survey also found that the age group with the most credit and store card and personal loan debt is 31-35 with an average borrowing total of £7,276, whereas the age group with the least is those over 50 with an average £3,928.

However, despite the increase in debt, the Fairinvestment.co.uk survey also showed that 70 per cent of those with store and credit card debts owe less than £1,000, and 60 per cent of Brits have no unsecured personal loans at all.