UK household debt to hit record high
According to the TUC’s analysis of household debt, unsecured debt per household will reach a record high of £13,900 this year, passing last year’s total of £13,200. By the end of the next parliament, its research suggests debt will exceed £15,000 (in 2016 prices).
This jump in debt reflects the UK’s ongoing living standards crisis, says the TUC. Wages in the UK remain worth about £20 per week less than before the financial crisis a decade ago. At the same time, recent figures from the Office for National Statistics (ONS) revealed real wages are falling again.
The TUC believes the growth in household debt should concern all the political parties. This is because the next government will inherit an economy that is heavily reliant on household spending to maintain growth, but in which debt per household is higher than before the financial crisis.
Frances O’Grady, TUC general secretary, said: “The surge in household debt is putting the economy in the danger zone. We’ve got this problem because wages haven’t recovered. Credit cards and payday loans are helping to prop up household spending for now, but millions of families are running on empty.
“The next government must act urgently to deliver the higher wages Britain needs for sustainable growth. They must boost the minimum wage, and end pay restrictions for public servants like nurses, firefighters and midwives.
“A lot more government support is needed for the parts of Britain where well-paid jobs are in short supply. Communities that lack good jobs today could thrive tomorrow if they get proper investment in training, transport links, broadband and decent housing.”