New Research Reveals High Levels Of Consumer Debt Among Majority Of UK Households
Arthur T Knackerbracket has processed the following story:
A new survey, analyzed by the University of Bristol and commissioned by abrdn Financial Fairness Trust, shows nearly two-thirds (65%) of households, amounting to 18.4 million, have consumer debt and more than 4 in 10 households (44% or 12.5 million) have taken out new borrowing in the past six months.
There are signs credit stress may be worsening, with 2 in 10 (16%) owing money due to missing at least one repayment on a credit commitment, up from 11% in May 2023.
The Financial Fairness Tracker has been monitoring the personal finances of households since the start of the pandemic, sampling around 6,000 households in each of the nine survey waves to-date.
The latest survey found 1 in 7 households (15%) have borrowed money in the past four weeks just to cover basic daily living expenses, such as food and bills. This rises to 35% among those in financial difficulty. Households on the lowest incomes were especially likely to be taking on debt, with 3 in 5 (61%) taking out new borrowing in the past six months (compared to 48% of middle-income households).
A quarter of households (25%) owe at least 5,000 across their various consumer credit commitments. This was higher among middle income households (31%) than those on the lowest incomes (24%), showing the total amount of credit owed does not always relate to the level of financial difficulty households experience.
Credit cards are the most common form of borrowing that households are using. A third (35%) of households owe money on at least one credit card, but 3 in 10 (28%) of those with credit card debt "always" or "usually" make only the minimum payment on their cards, potentially storing up problems meeting their commitments in future.
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