UK household debt has reached £1.43 trillion, a new record high according to a report from the Bank of England.
The previous high was set in September 2008 when the overall house debt level reached £1,429,595,000,000 but this month it’s up to £1,429,624,000,000.
It now means household debt has increased by £29m despite banks and financial organisations cutting back on lending during the financial collapse.
It also means every adult in the UK owes £28,489 on average.
Although the overall level of debt has risen to it’s highest level, the vast majority is secured debt, which includes mortgages and is evidence of a housing recovery.
The government help to buy scheme along with funding for lending has managed to get more people into the housing market by making mortgages more available.
House prices have also risen because more people are now able to get a mortgage; fuelling concern a new housing bubble could be created.
The amount of unsecured lending fell in October from £158.8bn to £158.6bn, which would seem to be further evidence of the economy recovering.
The drop in lending from financial institutions coupled with a rise in people entering debt solutions since 2008 has helped bring down unsecured borrowing.
UK Debt Problem
While a large portion of the overall debt may be due to mortgages, figures from the Money Advice Service suggest UK debt is still a serious problem.
Yesterday it was revealed 18% of UK citizens consider their debt problem to be serious, this equates to 8.8 million people.
In five Cities across England more than 40% of the population said they were struggling to repay their debt, while 74% said they were unhappy.
Getting Debt Advice
Debt doesn’t have to determine your quality of life and there are ways to resolving any financial problem by just taking a few simple steps.
- Get Debt Advice – The first and probably most important step in resolving a debt problem is getting high quality, free advice. Not for profit organisations are generally considered the best because you won’t be charged at any stage for the advice or service.
- Enter Debt Solution – Once you’ve been advised the best debt solution for you it’s important to enter it as soon as possible. An example is an IVA which entails debtors sending in documents before the solution can begin, the faster you send in all the documents the quicker your debt will be resolved.
- Income & Expenditure – If you don’t believe debt advice is necessary for your level of debt it may be better to complete an income and expenditure. It will help you assess where it’s possible to save money on a monthly basis which can go towards your debt.