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We're paying back more debt but still owe £8,000

Simon Ward
by Lovemoney Staff Simon Ward on 06 February 2012  |  Comments 7 comments

A new survey paints a worrying debt picture, with the average Brit still owing almost £8,000.

We're paying back more debt but still owe £8,000

The average unsecured household debt, not including mortgages, in the UK is now around £7,900, according to a survey by accountants PwC.

That’s despite us paying down our debts by an average of £355 per household in 2011 as the ongoing economic downturn saw us tightening our belts.

But the survey also reveals that younger people are struggling to live without credit. It found that 25% of the 25-34-year-old age group needed to use credit to pay for essential purchases.

And more than half of that age group admitted to concerns about repaying their borrowing.

The report also forecasts a rise in ‘alternative lending’, such as payday loans, as banks and other financial providers continue to restrict credit.

But one in three of the people surveyed said they expect to not have to use a credit card, personal loan or overdraft in the future.

PwC actually forecasts that we’ll still have £7,500 of unsecured debt per household next year.

The report also forecasts that free banking in the UK will eventually come to an end.

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Comments (7)

  • g1ng3rcat
    Love rating 5
    g1ng3rcat said

    Duh!! of course young people have debts - think about it... if you are trying to set up home independently on a lower income, yet get charged through the nose for things like car insurance and have no option but to pay sky-high rents for your accommodation...what else do you expect? Especially if, added to the above, you have to repay a student loan plus the additional debts run up on student living costs. Doubtless there are those reading this who will have little sympathy and reckon that if you never go out and work full time on top of your studies, you will be fine (financially speaking). I am here to disabuse them. I'm a 35-year-old part-time student fitting my studies around a full-time job. Nonetheless there have been times in the not-too-distant past when a garage bill has been necessary before I've earned the money to pay for it, etc. and hey presto! I'm another £500 in debt...

    Report on 13 February 2012  |  Love thisLove  1 love
  • Quarket
    Love rating 16
    Quarket said

    These debts can be broken down into avoidable and unavoidable debts. Some young people are there own worst enemy by loading up with avoidable debt to have the latest iPhone and expensive tariff and holidays they can't afford, fast cars they can't afford and I have no sympathy with them. However, they are all hit with the unavoidable debt which is caused mainly by the government, loading them up with student debt, and ambulance chasers and insurance companies, making the insurance of a car by anything other than an expensive monthly premium impossible. That is something I never suffered when I was much younger and I do have sympathy for them over these debts. These unavoidable debts will be the cause of the next time bomb to go off on a scale similar to the current pensions crisis unless there is regulation and legislation to diffuse it, but while the bomb has got about 10 years before it goes off, no government will diffuse it. They will wait until it is too late then each political party will blame the other for not diffusing it earlier. The young have been hung out to dry, particularly by the current government.

    Report on 16 February 2012  |  Love thisLove  1 love

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