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10 UK personal debt stats that will astound you
Terraced housing, and a financial story behind each door
Recently we released an important report called Debt and the Household, focusing on how British families were coping financially during these austerity times. You’ll probably not be surprised to hear that the conclusions made for grim reading.
The report was compiled by The Financial Inclusion Centre for StepChange Debt Charity and focused on “debt and financial vulnerability in the UK, the current trends and recommendations for policy makers”. Its findings have been reported over the past month throughout the press as we’ve felt that it’s vital for as many policy makers – the likes of MPs, think tanks and quangos – need to understand the state of the UK’s personal finances.
What did they find? We’ve compiled the headline figures for you…
10. StepChange Debt Charity clients earning £25,000-£50,000 owed an average of £28,569; those earning £50,000+ owed an average of £50,810
- Read more: Concern about debt burden of low income households
- Why this is important: Debt doesn’t just affect those on the lower rungs of the ladder – we counsel a significant number of UK citizens who earn much more than the median UK wage (£25,000 per year), especially those who are ‘asset rich cash poor’.
9. 1.1m households have savings under £1,000
- Read more: Over five million households not saving enough
- Why this is important: People who don’t have adequate savings are likely to rely on credit for unexpected purchases and not be able to pay off the debt quickly.
- How we can help: Read our guide to building up an emergency fund.
8. Only 5% of people who seek help from us have any savings
- Read more: Over five million households not saving enough
- Why this is important: Of those who contact us that do have savings, the average amount is £5,334. Ideally people should aim to have at least three to six months’ savings set aside as a cushion against an unexpected event.
- How we can help: Have a look at our article on thinking about money like our grandparents did.
7. 4.3m households have no savings
- Read more: Over five million households not saving enough
- Why this is important: As recent research from the Department for Business, Innovation and Skills also found, 27% of households with no savings rely on credit for everyday expenditure. To have over four million UK households without any savings means that if there are any shocks to the economy then a huge swathe of UKhomes will fall into unmanageable debt.
- How we can help: Read our guest blogpost from Annie Shaw Don’t trust your finances to fate on starting a fund, and if you need convincing why its important to safeguard yourself against the future have a look at Why will families be £1,500 worse off?
6. Over a third of our clients earning between £13,500 and £25,000 have no money to repay their unsecured debts
- Read more: Concern about debt burden of low income households
- Why this is important: As our External Affairs Director Delroy Corinaldi says, “I worry about the high debt burden that many are carrying and the impact it has on their ability to keep their heads above water”. Being unable to pay unsecured debt all too easily leads to a debt spiral.
- How we can help: Read about debt spirals and payday loans, to try to prevent falling into unmanageable debt.
5. 2.9m renters are in rent arrears or struggling to pay their rents
- Read more: Homelessness fears for almost three million renters
- Why this is important: We’re concerned that many renters will end up homeless as a range of the austerity budget pressures finally hit. As we say, unlike many homeowners, “renters have not benefited from historically low interest rates”.
- How we can help: You need to maximise your income. Read our guides 10 ways to increase your income and 10 MORE ways to increase your income.
4. The average unsecured debt of our clients on a low income is £12,870
- Read more: Concern about debt burden of low income households
- Why this is important: Low incomes are defined as those earning up to £13,500 a year and for these people their unsecured debt averages 199% of their annual income. In other words they owe two years’ wages in unsecured debt.
- How we can help: If this applies to you, you probably need to contact us. Without intervention you’re going to struggle for years to come. Read our blogpost Your debt help checklist: 4 steps you can take now towards a debt free future.
3. 6.2m UK households are financially vulnerable
- Read more: Trouble Ahead: 6.2 million households identified as financially vulnerable
- Why this is important: Being financially vulnerable is a stressful and financially-insecure place to find yourself. Without a safety net, if the worst was to occur could you survive?
- How we can help: Consider getting in touch with StepChange Debt Charity soon. Either use our online debt help or contact us, and read up on money-saving tips to make a positive change today.
2. 3.2m UK households are in financial difficulty now
- Read more: Trouble Ahead: 6.2 million households identified as financially vulnerable
- Why this is important: Financial difficulty means that you’re either three months behind with a debt repayment or are subject to some form of debt action such as insolvency. You’re in ‘problem debt’ right now.
- How we can help: Get in touch with us as soon as possible. Either use our online debt help or contact us today.
1. 1.2m mortgages are in arrears, in possession or subject to forbearance
- Read more: Busy times predicted for charities as 6.2 million households identified as financially vulnerable
- Why this is important: It means that 1 in 9 mortgages are in some kind of financial distress and are risking losing their property. Forget the credit card bill; mortgage arrears should be treated as a priority and need to be addressed right now.
- How we can help: Go through our guide Your debt help checklist: 4 steps you can take now towards a debt free future, use it to get the correct documents together and then contact us immediately.
(Statistics correct as of post publication date)
