UK Consumers Regaining Control Of Runaway Levels Of Personal Debt
Below is a MRR and PLR article in category Finance -> subcategory Other.
UK Consumers Regain Control Over Personal Debt Levels
Summary:
In recent years, personal debt in the UK has soared, largely fueled by increases in secured loans tied to a robust housing market. According to Creditaction, since 1993, debt has skyrocketed from £400 billion to £1,148 billion, growing at 10.2% annually, with a £100 billion increase over the last year alone.Body:
The UK has experienced a significant rise in personal debt, driven by secured loans aligned with a strong housing market. Creditaction reports that from 1993, when debt levels were around £400 billion, they have surged to £1,148 billion, increasing by 10.2% each year. This growth includes a £100 billion climb over the past year.Mortgage loans now comprise about 83% of total personal debt, reflecting a 10.3% increase to £956.3 billion in the past year. Both the Bank of England and the Royal Institution of Chartered Surveyors (RICS) note a rebound in the property market compared to the previous year. Mortgage approvals and inquiries from potential buyers are on the rise. According to a RICS spokesperson, 2006 may see the first annual uptick in activity since 2002. However, KingSturge predicts a modest 3% residential growth, while Halifax’s chief economist, Martin Ellis, suggests that high property prices relative to earnings could restrain housing demand, providing relief to first-time buyers.
Unsecured consumer lending grew by 9.8% over the past 12 months, slightly lower than secured loans. Bank of England data shows a small decline in monthly credit card spending from October to November. Concerns about debt repayment have been a key factor. Experian reports that three-quarters of Britons worry about financial pressures during the festive season, with 20% still repaying Christmas debts six months later.
Despite this, average consumer borrowing through credit cards, vehicle and retail finance, overdrafts, and personal loans rose to £4,121 per UK adult by November 2005. Average household debt was approximately £7,776 (excluding mortgages) and £46,491 (including mortgages). Each UK adult owed an average of £24,636, including secured loans.
The shift in payment methods has been notable, with debit cards surpassing credit cards to account for two-thirds of all plastic payments. This trend helps consumers maintain better control over spending without accruing additional debt. However, there is room for improvement, as the average credit card APR is 15.75%, about 11% above the base rate, according to Moneynet.
After a period of rising personal insolvencies, recent figures are encouraging. While trends show progress toward responsibility from both lenders and borrowers, there remains a need for ongoing education and action.
Disclaimer:
This article is for general information only and should not be considered advice under the Financial Services Act 1986. Professional and legal advice is recommended before entering any contracts.You can find the original non-AI version of this article here: UK Consumers Regaining Control Of Runaway Levels Of Personal Debt.
You can browse and read all the articles for free. If you want to use them and get PLR and MRR rights, you need to buy the pack. Learn more about this pack of over 100 000 MRR and PLR articles.