Sharp increase in average household debt, according to study

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Average household debt has increased amid rising precarious work and years of stagnant wages, new research shows.

The TUC said unsecured debt, other than mortgages, reached record levels last year.

Total unsecured debt reached over £ 400bn in the third quarter of 2019, well above the record £ 286bn in 2008 before the financial crisis, according to the report.

Government austerity, stagnant wages and an increase in the number of workers in precarious jobs are the main reasons for the increase, the TUC said.

Real wages are on average lower than before the financial crisis, pushing many workers to borrow money, according to the union organization.

TUC General Secretary Frances O’Grady said: “This is not about keeping pace with the Joneses – they are struggling families who borrow just to get by. It’s to pay the rent, heat the house and feed the children.

“The reason we are seeing this is the mismanagement of the economy. Salaries are worth even less than ten years ago. Too many people have precarious jobs with uncertain hours, and essential supports like work tax credits have been cut.

“The government must develop an urgent plan to improve living standards and help families struggling with dangerous debt levels. “

The TUC said its study counted unsecured debt like bank loans, payday loans, credit cards, bank cards and student loans, but excluded mortgages.

Unsecured debt per household rose to £ 14,540 in the third quarter of 2019, an increase of £ 430 from the previous year, the TUC said.

Phantom Chancellor John McDonnell said: “These results show the true cost of a decade of lost revenue under the Tories.

“Workers should not have to pay for the failure of the Conservatives’ economic ideology by taking on unsustainable debt, and deserve a salary that covers the essentials. “

A Treasury spokesperson said: “We want people struggling with debt to get the support they need, which is why we have created powerful powers to crack down on payday lenders and taken action on it. overdraft fees.

“At the same time, there is an almost record level of employment in the UK and wages are rising above inflation.

“The government has provided an additional £ 13.8bn for public services in 2020-21, while giving the lowest wages an anti-inflation pay rise thanks to our National Living Wage increase for 2020.”

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