You are here: Home - Credit Cards & Loans - News -

Average Brit owes £6,372 on credit cards, loans and overdrafts

Written by:
The average Brit now owes £6,372 on credit cards, loans and overdrafts - up 5% compared to a year ago.

In 2016, the figure was £6,086, according to research by MoneySuperMarket. This means UK consumer debt, excluding mortgages, now stands at £240bn.

The findings suggest almost three quarters (73%) of adults currently have some form of unsecured borrowing, with a third relying on credit to get by every month.

Worryingly, younger spenders rack up most debt, with almost a fifth (18%) of 18-34 year olds owing more than £10,000, compared to just 5% of over 54 year olds.

Indebted Londoners owe the most, at £10,244 on average, 61% higher than the national average. People in Yorkshire and the Humber owe an average of just £4,748.

Debt triggers

Over a third (35%) of those who have more debt than they had last year blame the rising cost of living, including transport, bills and groceries. However, three in 10 admit they are guilty of spending too much on luxury items, while 8% said they cannot control their spending.

People in debt have been so for two years on average and almost half (43%) have increased their debt by up to £1,500, or they haven’t cleared any of it over the last 12 months.

Five per cent cannot see themselves ever getting out of debt, meaning 37.6 million households will remain in the red this year.

Steps to take

Kevin Pratt, consumer affairs expert at MoneySuperMarket, said: “Inflation rose to a 32-month high in February 2017, hitting 1.8 per cent, which means the pressure on household spending is building. Indeed, the Chancellor said in his Budget speech last week that it would spike at 2.4 per cent later this year.

“That means people in debt will find it harder to get back into the black. However, there are some simple steps people in debt can take to make sure they’ve got the best possible chance of paying it off. For example, it’s important to shop around to make sure you’re paying the lowest interest rate you can.

“It’s also worth consolidating multiple expensive debts onto a low-interest personal loan. Rates are the lowest they’ve been in years so, if you’re struggling to pay off unsecured debt, this might be an attractive option. Another tactic is to transfer an outstanding credit card balance that’s charging interest to a credit card that charges 0% on balance transfers.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
Stock of the week: Inmarsat

Ian Forrest, investment research analyst at The Share Centre, picks satellite communications group Inmarsat as stock of the week.