ONS: British household debt averaging 173% of income!

WTF?_2

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/28/cndebt128.xml

British households are now more indebted than those of any other major country in recorded history, it has emerged.

Families in the UK now owe a record 173pc of their incomes in debts, official figures have shown. The ratio of debt to income is higher than any other country in the Group of Seven leading industrialised economies, and is sharply higher than the 129pc of incomes it was five years ago.

The figures, published by the Office for National Statistics as part of its National Accounts, underline the scale of the coming slowdown facing the UK, economists warned yesterday.

Michael Saunders of Citigroup warned that - at 173pc of household incomes - the debt burden is higher even than Japan's when it peaked in 1990, before more than a decade of deflation.
"Not only are we the highest in the G7, we are the highest a G7 country has ever seen," he said.

Hmmm, 173% of current income. Wonder what percentage that represents of their potential unemployment benefit? Even with the currently generous social security system (not to stay that way for much longer, I suspect) I get the feeling that it will be rather more than 173%. :think:

This is going to be a massive problem - over-indebted households with a wage-earner losing their job, defaulting on debts. Which will damage the finance sector even more and drive the price of credit/servicing debt ever higher.

Rearrange the following words: Roost, chickens, to, home, the, all, coming, are.

m00m00

it's about the audi innit.

mystic_trev

That's truly frightening!

Generali

It depends what the debt is being used for. If it's being used for productive investment it's not a problem. I suspect it isn't.

RichardDJ

Er wow - that is set of seriously troubling stats. I just can't get my head round all the doom and gloom at the moment.

All the borrowing thats happened, now the lack of lending thats happening, fuel, food, energy, inflation but hey, at least Germany didn't win!

It would've been the icing on the cake but it goes to show there are glimmers of light every now and again! Just need to look harder and harder each day at the moment

WTF?_2

mystic_trev wrote: »

That's truly frightening!

Don't worry - as long as employment is good, house prices stay high and credit is free and easy - no problem! Just remortgage your house if you get into trouble

Errrrr........ :think: :undecided :huh: :doh: _pale_ :eek:

Lotus-eater

Mmm, here's some figures on it from Credit Action


http://www.creditaction.org.uk/debt-statistics.html



Total consumer credit lending to individuals in April 2008 was £230bn. This has increased 6.5% in the last 12 months.
Total lending in April 2008 grew by £7.3bn. Secured lending grew by £6.4bn in the month. Consumer credit lending grew by £0.9bn.
Average household debt in the UK is ~ £9,223 (excluding mortgages). This figure increases to £21,450 if the average is based on the number of households who actually have some form of unsecured loan.
Average household debt in the UK is ~ £57,683 (including mortgages).
Average owed by every UK adult is ~ £30,260 (including mortgages).
Average outstanding mortgage for the 11.8m households who currently have mortgages now stands at ~ £102,070.



What it points towards, is that we have a large divide between those who do have large non mortgage debts and those that do not.

mitchaa

173% seems incredibly low if we are speaking about mortgage debt here aswell.

If average Joe has an income of £25,000 which is well documented in the press then his debt is only £43,250 (£25k x 1.73)

I wish i was only 173% in debt as do i suspect the vast majority of home owners. (If we are including mortgages here)

mustrum_ridcully

That's just the average, wonder what it's like when you take out all the people who don't have any debt (older pensioners for example who were taught never a lender or borrower be).

WTF?_2

Lotus-eater wrote: »

Mmm, here's some figures on it from Credit Action


http://www.creditaction.org.uk/debt-statistics.html



Total consumer credit lending to individuals in April 2008 was £230bn. This has increased 6.5% in the last 12 months.
Total lending in April 2008 grew by £7.3bn. Secured lending grew by £6.4bn in the month. Consumer credit lending grew by £0.9bn.
Average household debt in the UK is ~ £9,223 (excluding mortgages). This figure increases to £21,450 if the average is based on the number of households who actually have some form of unsecured loan.
Average household debt in the UK is ~ £57,683 (including mortgages).
Average owed by every UK adult is ~ £30,260 (including mortgages).
Average outstanding mortgage for the 11.8m households who currently have mortgages now stands at ~ £102,070.



What it points towards, is that we have a large divide between those who do have large non mortgage debts and those that do not.

I'd love to see how many of those in the greatest amount of total debt are those who have bought property since August 2005.......

The glorious house price boom has ended up wrecking the economy and putting a yoke of debt around the neck of hundreds of thousands (maybe more than a million) people.

It really is going to be a case of 'Boom to Bust' for the economy and 'Riches to Rags' for a lot of people.

lostinrates

mitchaa wrote: »

173% seems incredibly low if we are speaking about mortgage debt here aswell.

If average Joe has an income of £25,000 which is well documented in the press then his debt is only £43,250 (£25k x 1.73)

I wish i was only 173% in debt as do i suspect the vast majority of home owners. (If we are including mortgages here)

Yup, i thought that too.