Average household debt stands at £8k
The average household lessened its unsecured debt, excluding mortgages, by roughly £355 in 2011, research has confirmed. This is the third consecutive year that the amount of debt has fallen – and it now stands at £8,000.
PricewaterhouseCooper said that even after three years of paying down debt families are still struggling with their finances.
Simon Westctt, practice director at PwC’s Financial Services, said: “Three years of austerity by UK consumers has only made a small dent in the total levels of borrowing.
“In addition to this, there is a growing reluctance to borrow in the future and a marked deterioration in confidence about meeting repayments, particularly among 18 to 24 year olds consumers where less than half of those surveyed believing they will be able to repay their debts,” according to the Evening Standard.
The Consumer Credit Counselling Service (CCCS) revealed that 43 per cent of problem debt which was brought to the charity was credit card debt.
Una Farrell of the Consumer Credit Counselling Service said: “The best way to use a credit card is to pay off the balance every month,” she said. “People quickly end up with a debt problem if they only pay the minimum amount each month.
“It means that interest is building up and debt will take much longer to pay off, as well as costing more.”