More borrowing despite credit crunch
19/09/08
With times getting tougher in the UK borrowing has increased to make ends meet. The total unsecured lending stood at £215billion in August 2007 and new research from fairinvestment.co.uk shows that this figure is set to increase by 30 per cent year on year to the end of August 2008.
The average debt of UK adults stood at £4,524 at the end of August 2007 which includes borrowing via credit cards, motor/retail finance and unsecured loans. The new research from fairinvestment.co.uk consisted of a survey of more than 2000 UK residents has found that the average debt now stands at £5,886. This is £1,000 more than last year’s average.
This makes a new total of £279billion for unsecured borrowing. The research also shows that average credit card debts stands at £2,076 and average personal loan debt stands is £3,810. The results also showed that men have an average personal debt of £7,172 whilst women’s is at £5,404 hence men owe approximately 33 per cent more than women.
Commenting on the results, Fairinvestment.co.uk spokesman Matt Edwards said: "As people contend with rising fuel and food costs, it is no surprise that they have to borrow more. However, the downside of this will be the interest rates that could soon eat into people's pockets, as credit card and loan rates have risen considerably since the credit crunch began last year.
"A low level of personal debt for those over 50 suggests that the next generation of pensioners will be better placed than today's to deal with things like fuel poverty and recession."
Continuing on a positive note, Mr Edwards added: "Our research also showed that 70 per cent of Brits do not have unsecured loans, and 60 per cent of those with unsecured debt have credit/store cards of less than £1,000. This is good news as rumours of a recession circulate, people are going to need all the spare cash they can get their hands on, so large loan and credit card repayments could cause problems."
