UK sees Biggest Increase in Personal Loans and Overdrafts since before the Recession

Today the UK’s leading financial capability charity The Money Charity releases its Debt Statistics, giving an overview of the financial situation in the UK.

The UK is currently seeing the biggest increase in loans and overdrafts for individuals since February 2008, according to the latest figures from the Bank of England. Banks increased their non-credit card consumer lending by £1,087bn in March, the largest monthly increase since before the recession.

Furthermore, the rise in total consumer credit, which includes credit cards, is also at its highest for since September 2012, up by £1.132bn month on month. Total consumer credit lending has now increased for 17 months in a row, again, the most sustained growth since the recession.

The total amount of outstanding consumer credit in March was £159.765bn, the highest for over 2 years (since Jan 2012). The average consumer borrowing (including credit cards, motor and retail finance deals, overdrafts and unsecured loans) for UK adult was £3,184, figures from the latest Debt Statistics show.

 

Michelle Highman, Chief Executive of The Money Charity, comments;

“The fact that we are seeing the biggest increase in personal loans and overdrafts since before the recession could demonstrate a number of different changes in the industry, including an improved willingness to lend by the banks. Whatever the cause, it is important to ensure that whatever you are borrowing, you can afford to pay back.

Borrowing money when it’s done in a carefully thought out, affordable way, can make things happen that would otherwise seem impossible or actually save you money in the long run. However if you don’t have a plan to pay the money back, things can quickly spiral into more difficult, unmanageable debt.

Creating a budget is one of the best ways to help manage your money in order to tackle debt and rein in your spending. The Money Charity has a range of free tools and resources to help you get on top of your money (themoneycharity.org.uk). However, if you worried about keeping up with your debts, seek advice from one of the free and independent organisations available, including StepChange Debt Charity (0800 138 1111).”

 

Latest figures include:

  1. £54,546: average household debt (including mortgages) in March, up from £54,434 in February
  2. £6,048: average household debt (excluding mortgages) in March, up from £6,020 in February
  3. £161 million of interest was paid every day on personal debt in March
  4. £1.645 billion: daily value of all plastic card purchases in February
  5. 1,300 people were made redundant every day between December and February
  6. 807,000 people had been unemployed for over a year, between December and February
  7. Every 5 minutes 12 seconds someone was declared bankrupt or insolvent
  8. £1.441 trillion was the value of outstanding personal debt at the end of March, up from the same period last year
  9. £64.87: the cost to fill a 50 litre tank with unleaded petrol in April 2014
  10. 79 properties are repossessed every day

You can get the full picture at http://themoneycharity.org.uk/debt-statistics/