Household debt ‘will hit record high in first year of new government’
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The Trades Union Congress (TUC) is today publishing new analysis focused on household debt, which finds that unsecured debt per household will reach a record high of £13,900 this year.
Basing its findings on debt data from the Office for National Statistics (ONS) and a recent economic forecast by the Office for Budget Responsibility, the TUC claims the increase reflects the UK’s ongoing living standards crisis; with wages still worth around £20 per week less than before the financial crisis a decade ago.
The union found that unsecured debt per household was £13,200 in 2016 – the highest figure since the financial crisis – and only marginally below the peak of £13,300 in 2007. In addition, unsecured debt per household is predicted to exceed £15,000 before the end of the next parliament.
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“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,” said TUC’s General Secretary, Frances O’Grady. “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.”
County Court debt judgments against consumers have reportedly risen 35% in England and Wales, and the Bank of England is currently investigating concerns about unsecured lending to households.
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