Over eight million families in the UK have stated that their personal debt is a ‘burden’ on their household. It is estimated that the average home in the UK is about £3,200 in debt. A new report from the Office for National Statistics shows that debt problems have continued to increase since 2008 when the recession officially hit.
The Office for National Statistics report does not even consider mortgages; which likely makes the picture look even worse. Instead, it only focused on other types of common debt such as an overdraft, credit card debt, and personal loans.
During this survey an additional 420,000 families also answered that their personal finances were ‘somewhat of a burden’ or a ‘heavy burden’ compared to back in 2006 when the survey was originally conducted in healthier economic times. The study found that about one out of every two families struggle with debt with most of their take home pay going towards their debt on a monthly basis.
On the other hand, those that cannot afford to keep up with their debts have an even worse situation as the interest that they accumulate on their debts starts to get out of hand quickly. The ONS stated that outside of mortgages the total debt of all UK homes combined is £94.7bn which is almost ten billion more than the £85.9bn debt that was recorded in 2006.
The debt situation was the worst for people between the ages of 25 and 34 where the average debt is the highest at £4,300. Pensioners on the other hand have the lowest average debt with just about £1,000 to their names. This is likely because most people have their first child in the former age group which can easily cause extra costs to overburden a home.