How Much Is The UK In Debt?
Living in the UK isn’t cheap, and the last 12 months, with the coronavirus pandemic hitting hard around the world, has only made finances more difficult for many. Furlough, flexible working and mass redundancies have changed not just working practices across industries but also the shape and direction of any sectors and making it more difficult for those looking to find work.
Thankfully, the UK has many money lenders who are stepping up and helping people with short-term and long-term finance options to help them get by. As Britain’s leading loan provider, The Money Shop knows a thing or two about finance, so let us explain it all here.
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How much is the UK in Debt?
When we talk about debt, it’s important to understand the overall picture of lending across the country and the context it sits in now. The UK’s national debt is the total amount the British government owes to other private sector organisations and UK gilts’ buyers (a type of bond between government-issued units of debt and extremely low-risk for investors). In July 2020, the net debt of the UK public sector sat at £2,004 billion, which is the first time it’s ever sat at over two trillion. This is due to the ongoing impact of coronavirus lockdowns and restrictions on worldwide economies and is likely to rise further yet. Undoubtedly, this is a huge amount of money, but almost every country in the world has seen their debt rise at an unprecedented scale due to the turbulence over the last year.
What is the average household debt in the UK?
According to The Money Charity, as of December 2020, the UK’s average total debt per household was a whopping £60,860! On average, each adult in the country owes £3,815 in unsecured debt, and the average credit card debt per household is £2,094. At the end of 2020, individuals in the UK owed £1,695.4 billion. That’s an increase of £20.9 billion from 2019 (almost £400 per person in the UK). However, when you consider the context behind this increased borrowing and the circumstances the British public has been living in over the last year, these figures really come as no surprise.
In addition to this debt, many people owe money on interest payments and fees rather than the exact amount borrowed. In December 2020, the British public’s total interest payments on personal debt would have been £44,910 million across the year – an average of £1,511 per household and £848 per person. That works out at just under 3% of the UK average salary; so manageable, but a lot when you consider that it’s not technically an amount borrowed.