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What is the Average Debt Per Person in the UK?

Debt remains a significant concern for many across the UK, where households navigate a complex financial landscape marked by years of economic stagnation.

As of April 2024, the total household debt reached an astounding £1,850.1 billion, a hefty increase of £18.2 billion over the year. This rise translates to an additional £339.65 in debt per adult, highlighting the growing burden on Brits as costs rise and economic uncertainties persist. Based on these numbers, the UK's total interest payments on personal debt are £76.96 billion annually.

This blog post will explore the average household debt using data from The Money Charity and the reasons behind rising debt levels.

What is the average household debt in the UK?

As of April 2024, the average total household debt in the UK, including mortgages, stood at £65,143, with an average annual interest of £2,710.

When broken down per adult, this amounts to £34,487—approximately 97.0% of the average wages. These household numbers cover mortgages, outstanding credit card debt, personal loan debt and more.

Why are people falling into debt issues?

Multiple factors contribute to the rising tide of personal debt in the UK. A primary concern is the struggle against stagnant average earnings and the increasing cost of living. With interest rates fluctuating and energy bills experiencing a sharp spike, many find their real household disposable income insufficient to cover daily expenses. This pushes them towards reliance on credit cards and unsecured debt to bridge the gap. As of April 2024, the total unsecured debt sits at £4,232 per UK adult.

The allure of credit cards and other forms of consumer credit lending offers a convenient, albeit risky, buffer against immediate financial pressures. This has led to a significant accumulation of credit card debt, which can take years to clear if only the minimum repayments are being made.

Who is most likely to be in debt?

Debt impacts a wide range of demographics, but certain groups are more vulnerable. Young adults, particularly those between 18 and 34, are likely to get into more debt largely due to student loans and the initial challenges of establishing financial independence. Those aged 75 and above have the lowest credit card balances and overall household debt levels, reflecting a more stable financial phase of life.

Unsurprisingly, regions with higher living costs, such as London, often report higher overall debt levels compared to other parts of the UK. These variations highlight how income, employment opportunities and regional economic conditions can significantly influence debt levels for the average worker.

Getting out of debt

UK families manage household debt of all types every year. Better financial education, more responsible budgeting and money management strategies could help these families get out of debt faster. It is crucial to tackle high-interest debts first, such as credit card debt, which can grow rapidly. Debt consolidation also might be a viable option for those juggling multiple debts. This method consolidates various debts into a single personal loan, typically with a lower interest rate, making it easier to manage payments. We also recommend seeking professional advice from financial debt advisors and help directly from your lenders, who can provide tailored strategies for navigating personal debt in a sustainable way.

For those struggling with paying off debt, remember that you are not alone. We have many articles to help you budget, manage your savings account and get out of debt as soon as possible.

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