A recent report from Pricewaterhousecoopers (PWC) has highlighted the fact that UK families are typically £7,900 in debt from personal loans, overdrafts and credit cards. The Precious Plastic report shows that on average, households in the UK paid off around £350.00 of their unsecured debt in 2011, making it the third consecutive year of net repayments.
The report also indicated that consumers planned aimed to reduce their debts further over the foreseeable future, and estimated that the average level of debt would likely be reduced to £7,500 by 2013.
It could be seen that UK families paying down the debt is impressive given the backdrop of falling household incomes. The average income of a household fell nearly 3.5% in real terms over the last year, due to a combination of inflation and stagnating income.
There does appear to be an increasing mood of austerity among British consumers. According to figures from The Bank of England, consumers cut their debts at the fastest rate in two decades during December, suggesting they used savings to pay for Christmas instead of their credit cards.
But despite the austerity measures and concerted efforts to pay down debts, the dent made in the level of debt of the average household is relatively small and we remain amongst the most indebted nation in the world.
If you are concerned about unsecured debt and would like free advice in relation to how to proceed, either by way of a debt management plan, IVA or advice on bankruptcy proceedings, please do not hesitate to contact me.