UK Personal Debt Statistics: March 2012

I receive a monthly e-mail from Credit Action, listing the latest statistics on UK personal debt. Here are the headlines from today’s e-mail:
  • Outstanding  personal  debt  stood  at  £1.456  trillion  at  the  end  of  January  2012.
  • This  is  up  from  £1.452  trillion  at  the  end  of  January  2011.   Individuals  owed  nearly  as  much  as  the  entire  country  produced  during   the  whole  of  2011.
  • Outstanding  secured  (mortgage)  lending  stood  at  £1.248  trillion  at  the  end  of  January  2012. This  is  up  from  £1.240  trillion  at  the  end  of  January  2011.
  •  Outstanding  unsecured  (consumer  credit)  lending  stood  at  £207  billion  at  the end of January 2012. This  is  down  from  £212  billion  at  the  end  of  January  2011. 
  • Average   household   debt   in   the   UK   (excluding   mortgages)   was   £7,975   in January. This  is  up  from  a  revised  £7,951  in  December.
  • Average  household  debt  in  the  UK  (including  mortgages)  was  £55,988  in January. This  is  up  from  a  revised  £55,843  in  December.
  • The  average  amount  owed  per  UK  adult  (including  mortgages)  was  £29,634  in January. This  was  around  122%  of  average  earnings.
(Source: Credit Action)
For further data from Credit Action, click HERE


My thanks to the charity Credit Action for their latest credit data.

Previously, on my blog …

The last time I blogged about this, I reported that the “write-off rate” on consumer lending by UK monetary financial institutions to individuals increased further in the second quarter 2010 to 7.4%. In that quarter, UK banks and building societies wrote off £3.47bn, most of which was credit card debt.
Secondly, Credit Action reported that average household debt in the UK was £8,590 (excluding mortgages). They went on to say that “this figure increases to £17,896 if the average is based on the number of households who actually have some form of unsecured loan.”

That second statement puzzles me; I don’t agree with the idea of giving a second average that includes only those who have debts. An average is an average, including the highs and the lows and everything in between. If we exclude those with the very lowest debts (i.e. zero), then we should also exclude all those with the very highest debts, i.e. all of the “outliers”.

By the way, if one included mortgage debt, then average household debt in the UK was then about £56,690.

The report concluded that total UK personal debt at the end of August 2010 stood at £1,428bn, a slight increase.

Now for the update

The latest Credit Action report, which I received last week, still gives the second-quarter figure for the write-off rate on consumer lending, i.e. 7.4%; presumably the third-quarter figure is not yet available.

Total lending in September 2010 rose by £0.4bn; secured lending increased by £0.1bn in the month; consumer credit lending increased but only by £0.3bn. (a step-change from pre-recession days: total lending in Jan 2008 grew by £8.4bn)

Total consumer credit lending to individuals at the end of September 2010 was £216bn. The annual growth rate of consumer credit increased 0.3% to 0.6%.

Average household debt in the UK is ~ £8,562 (excluding mortgages). Again, they add, “this figure increases to £17,838 if the average is based on the number of households who actually have some form of unsecured loan.” Again, I find that second figure rather artificial.

Total average household debt in the UK (including mortgages) is approx £57,737; that’s an increase but only a very small one.

Your debt or the country’s debt?

If you thought that figure was highish, the report goes on to say that “if you add to this the March 2010 budget report figure for public sector net debt (PSND) expected in 2015-16 (excluding financial interventions) then this figure rises to £109,960 per household.” Sorry, but that is rather a jump of logic; the PSND is not my personal responsibility, although I would indeed be worried if I thought Mr Osborne would send the bailiffs round to ensure I cough up my share of the UK debt. Thus I feel this excellent report is slightly compromised by making the raw data appear worse through this addition.

And another thing … that last calculation is based not on current government borrowing but the projection for 2015-16; a lot can happen before then. “Things can only get better”, as the song says; at least I hope they will. Let’s hope, in particular, that the PSND in five years is lower than that prediction.

Back to the present

Finally, and if we deal solely in current and personal realities, total UK personal debt at the end of September 2010 stood at £1,455bn; as you can see, that’s a further slight increase. Based on their latest report, the people at Credit Action can still make the same statement that I quoted in my book “Back to the Black”. In their words: “Individuals owe more than what the whole country produces in a year.”
It is sincerely to be hoped that this worrying statement will be short-lived, and that GDP will continue to rise and personal indebtedness will start to fall.

To find out more about my new book “Back to the Black: how to become debt-free and stay that way”, go to