Apparently..
Total unsecured debt rose to £349bn in the third quarter of 2016, a record high and well above the £290bn peak before the 2008 financial crisis, it said.
So assuming 65 million people in the UK and 45 million over 16, so able to take out loans etc, that works out at:
349bn / 45m = £7.8k per person
Given it's unsecured, I assume it excludes cars and houses, which seems like a lot for a UK wide average, given that probably 20% won't own anything, so the average person with a debt will be a lot higher than that....
£7.8k... i wish !
Credit cards,innit
people often speak of another crash, could this be a cause?
What does unsecured debt mean? What is secured debt? I've never really known that. I feel very lucky not to be in debt, though I dream of buying a house (!)
Secured debt is linked to collateral. Like a mortgage for example.
Unsecured debt is stuff like credit cards.
I have £0. I have savings actually.
So one of you guys can have my £7800 to add to yours
I'll take that YGH 🙂
car loan is unsecured. not sure about car hp and the other types of car 'renting'
In some ways it seems quite high, especially if you consider that's £15.6 k per married couple.
On the other hand, I use my credit cards even though I have cash savings far in excess of the balance.
Lies, damn lies and statistics innit
people often speak of another crash, could this be a cause?
Yes, its a race to see whether personal or national debt screws us all first.
Unsecured debt is stuff like credit cards.
I would guess mainly credit cards, store cards, over drafts and small bank loans.
car loan is unsecured. not sure about car hp and the other types of car 'renting'
A car loan is [i]usually [/i]secured against the car.
A personal loan is [i]usually [/i]unsecured.
Very lucky to only have about £400 on a credit card, which will be cleared at end of month as usual. (Use it for the extra protection it provides).
Older car, no fancy TV or owt like that but most helpfully no kids. I'd hate to have the stress of thousands of pounds of debt hanging over me, either just to survive or to provide a lifestyle I couldn't afford.
Well if the performance of some of the 'adults' I know is anything to go by (I have previously posted on here about it) it doesn't surprise me one bit. I hate it at the moment because I have £2,700 outstanding on a CC (we borrowed a bit on a 0% card to cover some 'extras' we wanted when we modernised our kitchen last year). It is due to be paid off in June and I can't wait to see the back of it.
I'd say something's wrong in the assumptions you've made.
are student loans lumped into that?
I believe they are, yes.
Count me in, been debt free for years but just splashed out on a fancy new bike. It's interest free for a fixed period so I'm on bread and water rations til then, damned if I'm paying interest on it.
are student loans lumped into that?
That might explain it, about £10bn a year is loaned out each year IIRC.
EDIT about £86bn at the moment in total....
So revised per person figure is
(349bn -86bn) / 45m = £5.8k per person
My household's unsecured personal debt is in the same order of magnitude as the average, which makes me wonder how on earth people significantly above average cope.
I'd be interested to see if student loans are included - it would skew it a bit (although I've been debt free at one point since university).
From what I understand about half the amount is student loans (scary big number for ex-students and how can Higher Education be in such a mess).
From what I understand about half the amount is student loans
Only £86bn
https://www.ft.com/content/55f4a6f6-3eab-11e6-9f2c-36b487ebd80a
£7.8k.
You could get a new bike for that ....
£192B according to BoE last week excluding student loans. Although their total including student loans is probably lower and reflects to some extent the message the TUC or BoE are trying to get across.
Sum total of zero for us (excluding varying random amounts on credit cards paid off each month before interest accrues).
Why is Higher ed in a mess? Government insisting that *all* not just the brightest go to university combined with a desire to get as many people as possible on the debt ladder.
alcolepone - Memberpeople often speak of another crash, could this be a cause?
More often than not crashes are caused by a sudden realisation of lack of wealth, or reduction in avilability of easy / cheap credit.
As long as their has been an economy there has been
Maybe, but the unsecured debt market is based on the idea that one day, lots of people might not pay.
It's the secured debt market that is going to cause the next crash if/when it comes - too few houses, too many people because of restrictive planning laws designed, not for the sake of green fields - but to 1) appease Daily Mail readers who think high values make them rich 2) to keep prices very high through a deep and long recession to keep the banks liquid.
Now the legislation has been, in part, lifted and new houses are being built in the thousands and thousands, prices will soften - if that comes at the same time as increased interest rates we will have a collapse of consumer confidence and another recession.
Oh as we're sharing.
Savings £0, but we used it all moving house last month, it'll go up soon.
Debt £5k or so, £2500 on prime rate cards as a result of increased costs in regards to Childcare for small child, £2500 for a near as dam it 0% graduate loan. One goes up as the other goes down - so managing to keep balanced at the moment. It's less than 10% of our annual income so it's manageable.
The crisis was a crisis of too much debt the catalyst was central banks flooding markets with liquidity at times of ultra (artificially) low interest rates
We have done little, if any de-leveraging and debt levels remain very high in absolute and historic levels - one reason why policies are not working well - the only relief is that at least this time central banks are not flooding markets with liquidity at a time of ultra (artificially) low interest rates.....oh, wait a minute
This (should not) include student debt
Unsecured explained above - the lack of security is why credit cards have 18%+ APRs to compensate for when some people dont pay the bank/stores/fin companies back
Our addiction to debt-fueled consumption remains strong. Just wait for when the BoE has to raise rates!!
Also, we've factored in Brexit in to our PD/LGD rates, remanufactured from our pre 23/06 submission.
Not looking healthy that's for sure.
You keep asking for Banks to lend more, if you could see the other side of unsecured debt you'd understand why we're reluctant to lend. The flip side is the Governement want us to lend more because it keeps you on the treadmill working.
BOL with working longer for less and being geared higher than a SS'er on a 29'er on the flat.
About £10k here - split across several credit cards.
We borrowed a load of money to extend our house and this is the remains of it.
Doesn't bother me too much - I've got no other debts (except mortgage) and have a company car.
Childcare costs have stopped me clearing it, but it should be gone in 2-3 years.
I also wonder how much of that is genuine debt and how much is gaming the system (which i do in two ways)
I have typically about £1000 a month on credit card - because i pay for almost everything with it (and if it was contactless, I'd probably use it for everything) but it's only for convenience, the protection on purchases, and so i can leave the real cash in the bank offset against mortgage interest. It doesn't count as debt to me because i don't overspend, hence the positive bank balance vs the CC debt negate each others. Same with the wife, although as she also manages the household budget her CC balance is closer to £1800 by the time of each statement.
Secondly (and as said many times before) I also use CC's balance transfer offers for purchases rather than using savings. Less so now that interest rates on the savings accounts / mortgage interest offset is smaller but in the past have had 'large' debts which weren't really debts atall.
Now the legislation has been, in part, lifted and new houses are being built in the thousands and thousands, prices will soften - if that comes at the same time as increased interest rates we will have a collapse of consumer confidence and another recession.
You reckon?
House building hasn't increased at all so far and post Brexit with no Polish brickies, who will be able to build them for us?
I also wonder how much of that is genuine debt and how much is gaming the system (which i do in two ways)
Yeah, there'd be a decent bit on interest free 'loans' on credit cards.
If, like a lot of people I imagine, people use their credit card for the monthly shoppping, petrol etc. and pay it back at end of the month it's still count towards the 'debt' mountain too.
Student loan makes me about average. But I don't count that as repayments aren't made out of disposable income, it's just a higher tax rate.
Credit card has been £0 since I was put at notice of redundancy. Before that it was always pretty much equal to whatever disposable income was as I used it as my main card and just paid it off every month. So it's quite conceivable that I'd have rated as well above average even without having anything that I'd have considered a debt.
Could the rising figure not be just the result of the first wave of students with £50k of debt coming onto the books?
If, like a lot of people I imagine, people use their credit card for the monthly shoppping, petrol etc. and pay it back at end of the month it's still count towards the 'debt' mountain too.
We do this, but no where near the £8k figure.
P-Jay - Member
new houses are being built in the thousands and thousands
We don't need thousands of houses, we need millions.
We do this, but no where near the £8k figure.
So do we (normally about £1500 a month goes on the CC and is paid off in full). Used to use a Capital one cashback card then moved to a Tesco Rewards one when Cap One stopped the cashback deal.
However, if they count all of us doing the same towards their debt calculation it is going to badly skew their figures.
We do this, but no where near the £8k figure.
Obviously, but it'll contribute. I dont have any debt per se, but I suppose technically I owe the credit card company £1500 this month (whilst having £1500 waiting to cover it).
Chuck in a few buy-now, pay-laters, even Cycle to Work (maybe?), interest free on your double glazing or sofa, there are probably a few 'invisible' elements to the £6k we all supposedly have in debt (as an average).
as someone else said above; it is counted because
1/ if we all opted one day not to pay it, it's unsecured
2/ it probably suits the narrative of what they're trying to 'sell'
3/ lies, damn lies, and statistics
footflaps - MemberNow the legislation has been, in part, lifted and new houses are being built in the thousands and thousands, prices will soften - if that comes at the same time as increased interest rates we will have a collapse of consumer confidence and another recession.
You reckon?
House building hasn't increased at all so far and post Brexit with no Polish brickies, who will be able to build them for us?
Yep, it will have an effect where they're being built, we/they/the goverment cannot afford to have some massive house building boom because it will be too great an effect, but it will still happen.
Got approx £35k in unsecured loans (if we include car in this?) so it probably only takes a few nutters to take the average well up.
Yep, it will have an effect where they're being built, we/they/the goverment cannot afford to have some massive house building boom because it will be too great an effect, but it will still happen.
Depends where they're built. Reading is getting in effect a new garden city/village built South of the M4 (the snappily named "South of the M4 SDL"). So that will undoubtedly add considerable downward pressure on house prices in the area. On the other hand we're getting Crossrail to Reading and a new business park in amongst the houses. So as long as the number of accessible jobs keeps pace with the housing it shouldn't have an impact.
Presumably the figure is an average of several snapshots so occasional big spends will even out.
We don't need thousands of houses, we need millions.
Yes, the buy to let people have run out of stock to rent...