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

Low pay, insecure work and austerity feeding growing debt crisis

Written by: Emma Lunn
Unsecured debt per household rose to £15,880 in the first quarter of 2019, up £1,160 on a year earlier, according to the Trades Union Congress (TUC).

The TUC believes that persistent low pay is the key driver of household debt. According to the group, real wages are still lower than they were before the 2008 crisis and working families are struggling to make ends meet without going into the red.

A report by the TUC found more than half of households report having unsecured debt, most commonly in the form of credit card debt (60 per cent), overdraft (28 per cent), personal loans (25 per cent) and car finance (25 per cent).

Young people are disproportionately likely to be in debt. Seven in 10 (70 per cent) of 18 to 34-year-olds report having a type of unsecured debt. This drops to 33 per cent among people over 65.

The TUC figures also show that of those households with unsecured debt, one in five say repayments are a “heavy burden on their finances” while one in seven (14 per cent) have fallen more than two months behind on repayments in the past year. Almost half (45 per cent) don’t feel that they have enough money set aside for emergencies.

Frances O’Grady , TUC general secretary,  said: “Our broken economy is forcing working families deep into debt. Low pay, insecure work and austerity have pushed millions of households to the financial cliff edge. Big corporations are raking in huge profits at working people’s expense. And successive governments have done nothing to avert the crisis.

“It’s time to reset the balance of power in our workplaces and our economy. Government must make more employers negotiate pay and conditions with unions. That will lift wages for everyone and stop working families having to rely on credit cards and overdrafts to get through the month.”

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.

The savings accounts paying the most interest

It’s time to get your finances in shape, and moving your cash savings to a higher paying deal is a good plac...

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

The experts’ guide to sorting out your personal finances in 2021

From opting to ‘low spend’ months to imposing your own ‘cooling-off period’, industry experts reveal 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.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

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...

Money Tips of the Week