Here are some truly frightening statistics, many of which have been extracted from
Credit Action's debt statistic's newsletters (thank you Robert for allowing their publication), with some of my own comments added:
Total UK personal debt is about £1.4 trillion. If this were to be converted into £1 coins and put on top of each other, it would encircle the whole English coastline one and a quarter times. The nation is literally surrounded by debt!
UK personal debt is growing at about 10% a year, more than three times the rate of inflation and more than 5 times the rate of growth of the economy. Surely this cannot be sustainable in the longer term?
The average borrowing by UK adults has been growing by between £190 and £400 in recent months. For many yeas now we have been borrowing an extra £1m every 4 or 5 minutes in an insatiable appetite for credit. If this increase were to be converted into £1 coins, the pile would be growing at about 27 miles an hour!
Over 10 million adults are in serious debt.
12.7 million people have taken out a new loan to consolidiate existing borrowing. Two thirds of those go on to build up even more debt.
Personal debt as a proportion of income has risen from 105%, slightly more than a year's pay, in 1997, to 164%, more than 20 months' income, in 2006. The average person now sees over half of their monthly take home pay eaten up in debt repayments!
The number of County Court Judgments has risen to a 10 year high. About a million CCJs will be issued in 2007.
Total credit card debt in September 2007 was £54 billion. About three quarters of credit card balances attract interest, and the average rate of interest was about 17.5%, more than three times the base rate.
House repossessions are rising: about 30,000 homes will have been repossessed in 2007; 2008 is expected to see a 50% increase on that figure, to 45,000 repossessions. About 80 houses a day are being repossessed at the moment. At the end of June 2007 the mortgages on over 125,000 homes were three months or more in arrears: this figure can be expected to rise dramatically in 2008 as about 2 million people come out of their fixed rate agreements in late 2007/early 2008, and rising costs of living eat into their available cash.
A typical two income couple buying their first property in 2006 had to pay one third of their income to meet their initial mortgage payments, the highest level since 1990 (about the time of the last recession).
Income multiples for first time home buyers reached their highest ever level in August 2007, at almost 3 and a half years' income. The average new mortgage for first time buyers is now about £120,000.
Half the population could survive financially for just 17 days should they suffer an unexpected loss of income.
111,000 people went into IVA or bankruptcy in the 12 months to 30 September 2007, over 300 people per day.