Consumer debt averages £13,000 per household

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  • Consumer debt averages £13,000 per household
  • cranberry
    Member

    I heard this figure this morning and was rather surprised – what are people using/wearing out that they haven’t finished ( started ? ) paying for ?

    Average household income is £26,000 – average debt 50% of that – I wonder how people sleep at night knowing that they owe 6 months of work to financial institutions.

    Shiny bikes innit.

    legend
    Member

    Does that include cars?

    Premier Icon jam bo
    Subscriber

    does that include mortgages?

    Does it include Brownie Points?

    I’ve earned a shitload of them over the years but still unsure of how to actually redeem them.

    cokie
    Member

    Interesting.. surely that’s quite easy to achieve, and exceed, if you have 2 (or even 1) car(s) in the household. A couple good cars could easily set you back £13k, plus the associated running costs on top. That ignores mortgage, house bork & children.

    Premier Icon chakaping
    Subscriber

    Does that include Intense bikes?

    It includes student debt which is at ridiculous levels these days.

    whitestone
    Member

    Our household debt varies between zero and a couple of hundred quid on the credit cards that are on automatic payment at the end of each month. So some households must have a huge debt to compensate for those like us.

    toby1
    Member

    I NEED to buy a LOT of Jaffa cakes a month. Don’t judge me!

    Premier Icon wool
    Subscriber

    Does that include Intense bikes?

    LOL

    Premier Icon kimbers
    Subscriber

    Consumer debt averages £13,000 per household

    I heard this figure this morning and was rather surprised

    Austerity, low wage economy + low interest rates innit

    the ‘recovery’ since the crash is a sham

    If that’s excluding the mortgage 😯

    A couple good cars One shit car could easily set you back £13k,

    Ewan
    Member

    Interesting.. surely that’s quite easy to achieve, and exceed, if you have 2 (or even 1) car(s) in the household. A couple good cars could easily set you back £13k, plus the associated running costs on top. That ignores mortgage, house bork & children.

    It’s debt tho. Surely most people own their cars?

    Does the original number include mortgage? If so I’m much worse, if not then I’m vastly better (zero).

    trail_rat
    Member

    from what i see its not always those you most expect to have the most debt.

    i know some folk on seriously good wages that have frighteningly high debt levels.

    Its come to a fore when one or both lost their jobs in the industry im in.

    trail_rat
    Member

    It’s debt tho. Surely most people own their cars?

    even a sample on here where many folk are bangernomic central there is a high proportion of car renters (its still a debt)

    km79
    Member

    I wonder how many households have zero debt. Cant be many these days.

    Premier Icon bikebouy
    Subscriber

    Does this figure include Tesco Club Card points ?

    The Debt pipeline looks ominous.

    tjagain
    Member

    zero debt? Me. excluding around 10 000 on mortgages

    Premier Icon howsyourdad1
    Subscriber

    Cool! YOLO

    Premier Icon jekkyl
    Subscriber

    PCP bumps it up I reckon, people don’t regard those as debt.

    Premier Icon thisisnotaspoon
    Subscriber

    does that include mortgages?

    Not usually.

    ‘Consumer’ debt (like the consumer price index) is calculated without housing costs.

    As others said, £13k is a hatchback on finance though. Not something I’d do, but I can see the appeal of never actually having to buy a car just (effectively) lease it and use the residual value after a few years to pay off the remainder of the debt. In which case if the repayment’s are manageable and income is secure I see no major problem.

    Last month my ‘banger’ cost me a grand in tax insurance, mot, tyres and suspension bushes all at once. OK so fingers crossed it’ll be zero for the next 11, but it’s still makes a £200/month all inclusive payment seem appealing!

    cranberry
    Member

    To be clear – that figure excludes mortgages, but includes Intense bikes and jaffa cakes.

    aP
    Member

    So, what’s the average level of savings?

    Premier Icon siwhite
    Subscriber

    I wonder how many households have zero debt. Cant be many these days.

    If you exclude our mortgage, we have no debt – not even credit cards. Can’t stand the idea of owning something that isn’t really mine, or paying interest when it isn’t absolutely necessary. Perhaps an old fashioned view these days…

    whitestone
    Member

    I wonder how many households have zero debt. Cant be many these days.

    We are, subject to the temporary spending on the credit cards for internet shopping which gets paid off automatically each month. Mortgage is paid, car is paid. We don’t buy stuff on hire purchase or credit schemes.

    @Ewan – the figure is “Consumer debt” which usually doesn’t include mortgages.

    Premier Icon iainc
    Subscriber

    if it includes things like cars on PCP it’s easy to see why it’s a high figure. Many folk driving around with such deals, self included, with PCP figs 2 or 3 times that.

    Premier Icon binners
    Subscriber

    All that coke isn’t going to snort itself. Then there’s the hookers…

    cokie
    Member

    It’s debt tho. Surely most people own their cars?

    Nope, nope, [url=https://www.ft.com/content/d340ea28-5040-11e7-bfb8-997009366969?mhq5j=e2]nope [/url]and nope. It’s scary how many cars are in secured/unsecured debt. There’s also the ‘leasing’ debt on top of this in car ownership. 55 page thread and running on Pistonheads on this.

    i know some folk on seriously good wages that have frighteningly high debt levels.

    Agreed, I’ve got friends earning more than me, but they’ve over stretched the mortgage and finance expensive cars (and holidays) who are in huge debts. A recent friend had their brand new VW Touran reclaimed on failing payments just 4 months in. Keeping up with the Jonses, showing off their ‘success’ and the instant gratification economy.

    A friend on Facebook rented a Lambo Huracan with the usual hashtags claiming to have worked hard for it. Turns out it’s a rental and cost £5k for the week, all on a loan.. 😯

    Premier Icon thisisnotaspoon
    Subscriber

    We are, subject to the temporary spending on the credit cards for internet shopping which gets paid off automatically each month. Mortgage is paid, car is paid. We don’t buy stuff on hire purchase or credit schemes.

    Pretty much the same in our house.

    I have a ‘save it then spend’ mentality, she saves then get’s stuff on credit preferring to keep the cash in the bank on the basis we could pay off the credit if needed but can also use it for unforeseen costs too. Which makes sense, it’s easy to get good terms when your not in a hurry and means not having to use the CC at 20% to cover anything unexpected.

    DrJ
    Member

    So, what’s the average level of savings?

    -13K innit.

    thomthumb
    Member

    what are people using that they haven’t finished paying for ?

    about that much on a professional loan for law school fees in our household. second only to the mortgage.

    Premier Icon jam bo
    Subscriber

    I’ve often thought that PCP/lease cars are the next mis-selling scandal.

    geetee1972
    Member

    I remember regularly seeing headlines of this nature in the years leading up to 2008 along with regular warnings that such high levels of personal/consumer debt just weren’t sustainable and there would have to be a major readjustment (i.e. a crash) to rebalance everything.

    I think though that the figures being regularly quoted back then were more like £30k.

    Graduate debt isn’t really debt it’s more like deferred tax (repayment only kicks in above a certain threshold, it’s progressive in its structure, it dies with if left unpaid etc – all of this makes it more like deferred tax than a debt) and probably should be removed from the calculations if what you want is to represent something meaningful about the sustainable position of personal debt.

    FunkyDunc
    Member

    Fancy northern trouser made out of animals init

    steve_b77
    Member

    cokie – Member
    Interesting.. surely that’s quite easy to achieve, and exceed, if you have 2 (or even 1) car(s) in the household. A couple good cars could easily set you back £13k

    That might get you one decent couple of year old family sized car, if you’ve got two of similar vintage that can easily double, if you like the more premium side of things, quadruple it for two.

    [/quote]It’s debt tho. Surely most people own their cars?

    I think you’ll be surprised

    kerley
    Member

    Surely most people own their cars?

    I would guess the opposite. I only tend to own a car after the loan has finished but then typically buy a new one with another loan.

    Not sure how many students have debt but most are going to have around £40k which will throw out the numbers. As most will not actually be paying it back or paying back a minimal amount it is not really the same as ‘normal’ debt though is it, i.e if I get a job that pays £20k per year I still have to pay my loans…

    Premier Icon deadkenny
    Subscriber

    Ewan – Member 
    It’s debt tho. Surely most people own their cars?

    In the same way most “own” their home, but it’s all on debt/credit.

    Most cars are bought on finance deals, loans and credit cards.

    0% interest deals will still count as debt until paid off. Noting that people fail to make payments and then get hit with big fees and interest. Some car finance deals are HP where it’s regular payments then pay a lump early to own it, or otherwise keep regular payments and end up paying fair bit more than the original price, and a lot end up doing this.

    Premier Icon binners
    Subscriber

    It’s scary how many cars are in secured/unsecured debt.

    There was an article in the Financial pages of the Guardian a few weeks back saying how the banks somewhat dubious attitude to handing out car loans and finance like confetti, without checking if anyone can actually afford the repayments, is storing up a sort of mini ‘sub-prime’ crisis

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