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UK household debt soars to £1.5 trillion

Staff Writer | November 8, 2016
UK household debt has swollen to £1.5 trillion in the UK for the first time, with indebtedness growing at the fastest rate since before the credit crunch of 2007.
UK house price
Britain   Calculations by the Money Charity
Before the peak of the financial crisis in 2008, personal debt in the UK reached £1.4 trillion.

Following a recent low of £1.36 trillion in December 2011, calculations by the Money Charity put growth in the last five year at £140bn to over £1.5 trillion this month, which is £55,683 per household and £1,037 extra per adult.

Adults in the UK owe on average nearly £30,000 each, which around 113.7% of average total annual earnings and 83% of the country's annual economic output.

Majority of this debt (87%) is in the form of mortgages secured by property with gross mortgage lending at £20.5bn. Individuals also owe an average of £3,737 in loans and credit cards. Outstanding consumer credit lending was £188.7bn at the end of September and total net lending to individuals by Banks and building societies rose by £4.7bn or £157m a day.

The Office for Budget Responsibility's July 2015 forecast predicts household debt will rise further to £2.6 trillion in the first quarter of 2021, raising the average household debt to £94,481.

The charity also highlighted that in the same time, government debt also grew by £108m a day and £4,090 per second.

The charity's figures come after the Bank of England last week warned inflation rates are likely to rise to 2.7% in 2017.