Brits borrowing more than ever!

23 March 2015

loanshark According to statistics, consumers in the UK are borrowing more than ever. Some think this is a good thing as it shows the economy is improving and temping a good number to reach for the plastic again. Some will think this is a sign that everyone is still skint.

This latest PwC study (in partnership with YouGov) found that the average household now owes more than £9,000 on their credit cards, overdrafts and personal loans. They've not covered mortgage debts. This is a 10% increase in the size of the typical debt and means that, what's happening now is that the average British home that is in the red is now at pre-recession levels.

"Underlying this significant growth in overall unsecured borrowing, we also saw changes in the way people borrow," noted Simon Westcott, a director at PwC. "Old favourites such as credit cards are staging something of a revival, while newer forms of borrowing such as peer-to-peer lending are starting to gain ground."

The positive spin is that it looks like people are borrowing because they want nice things and are confident about the security of the future, rather than borrowing money out of desperation. We can almost hear some BW readers shouting at their screens about people learning nothing about getting into debt and the delicate nature of the economy.

While there's historically-low interest rates, the Bank of England could put rates up over the next few months which means some folk will find themselves struggling again.

In short, don't get carried away if you're thinking of flexing the plastic.

TOPICS:   Banking   Debt

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