Debt in the UK continues to rise at a much higher rate than the average household income. High borrowing as many may think, is not limited to those restricted by a low income.The media has revealed more than a few rich and famous people that have fallen into the debt trap. From royalty to ex-millionaires, all types of people have been named for spending above their means. It is a well known fact that, for most of us, when riches increase so does our level of spending.
People in the UK owed £1,714.4 billion at the end of April 2021. This is up by £36.8 billion from £1,677.6 billion at the end of April 2020, an extra £695 per UK adult over the year. The average total debt per household, including mortgages, was £61,509. This is according to the money charity an online resource providing information and advice on money affairs.
It is almost impossible for anyone to escape the aggressive marketing and advertising campaigns on the television, billboards, radio and magazines for products and services. We are all vulnerable in some way; but unlike individuals who only have themselves to satisfy when considering what to buy, parents have the added burden of beloved children adding to the pressure group. This often can be the straw that breaks the camels back. The marketers know this and cleverly and aggressively target the children as well as the parents when striving to sell their products.
We now live in a society where ones wealth can be displayed not upon what we actually earn or possess, but rather how much we are able to borrow. Buy now pay later, the availability of instant credit for up to 5 - 7 years, and all aspects that are used to entice us into spending more of what we have, or worse still, to spend more of what we don't have!
Many parents are caught in the trap with a two-edged sword. No parent wants to be a scrooge, or to see their child unhappy. There are the pressures of yearning to fulfil your child's desires to keep up with friends and to fit in. In contrast to this, there is the constant drive of the conscience to balance the expenditure with the income, to keep your head above the water, and to maintain some form of control. It is a constant daily battle and the all to easy option is to give in by accepting an even greater depth of debt.
In recent years the Bank of England revealed that new consumer credit has the fastest rate of growth since records began almost twenty years ago. This is in line with the statistics provided by money charity which shows that the growth of lending has rocketed between April 2020 to 2021. All of this occurred during a period when according to the Office of National Statistics UK (ONS), the rate of total and regular pay growth had stood at 2.9% in December 2019 to February 2020 immediately prior to any impact from the coronavirus (COVID-19) pandemic.
ONS figures This then slowed sharply in April to June 2020 to negative 1.3% for total pay and negative 0.1% for regular pay before some increase between July and November. The lower % growth figure for total pay reflected many bonus payments being cancelled or postponed.
Student loans, small business bale out loans, unsecured personal loans are all debt that if not managed can put extreme stress and pressure on a family. Are you in debt and need help? Contact your local Citizen Advice Bureau, or the Consumer Credit Counselling Service now called step change. If you are in money trouble it is important to get help don't bear the burden alone. There are many people in debt so don't feel as though it is something to be ashamed of or something you need to hide, call someone today.