Household debt levels reach new highs
Analysis from the federation of trade unions showed that unsecured debt, which covers debt outside of mortgages, has reached new highs. Average unsecured debt per household rose to £15,385 during the third quarter of 2018, representing an increase of £886 the previous year.
Total collective unsecured debt rose to £428bn during the third quarter, which is a record high and sits well above the £286bn peak in 2008 – ahead of the financial crisis. This means that unsecured debt as a share of household income is now 30.4%. This is the highest it has ever been.
The trade union organisation believes that working families are worse off today on average than before the financial crisis, with millions of households borrowing to get by.
The TUC believes that government austerity and years of wage stagnation lie behind the increase in unsecured debt.
“The government is skating on thin ice by relying on household debt to drive growth. A strong economy needs people spending wages, not credit cards and loans,” said TUC general secretary Frances O’Grady.