Concern as credit card and loan debt grows to 11-year high
The Bank of England’s money and credit report revealed consumer debt in the month before Christmas was at its highest level since October 2005.
November’s figure it’s much larger than the average monthly increase of £1.6bn over the previous six months.
Within consumer credit, credit card lending increased by £0.6bn in November, which is broadly in line with the average over the previous six months.
Other loans and advances increased by £1.4bn, compared with an average monthly increase of £1.1bn over the previous six months.
This brings the total amount of outstanding consumer debt, which includes credit card, other loans and advances, but excluding mortgage debt, to £192.2bn.
Joanna Elson OBE, chief executive of the Money Advice Trust, the charity that runs National Debtline, said with consumer credit continuing to soar at a time of UK economic uncertainty, we should all be concerned.
“Most people are currently able to handle this extra borrowing, but if the economy does indeed suffer in the years ahead, these extra debts could become even more difficult to repay.
“We would urge households to review their financial position carefully before taking on any new borrowing, and consider how they would cope with the repayments in the event their circumstances take a turn for the worse.”
Elson said that as the figures only take into account some of households’ pre-Christmas spending, the numbers could be even more stark.
“Our research shows that one in three Britons put Christmas on credit – and we are already seeing a surge in people contacting National Debtline for advice as a result.
“Anyone who is struggling to cope should seek free advice from a charity-run service such as National Debtline as quickly as possible.”
If you’re struggling, visit the National Debtline website or call 0808 808 4000.