ONS: British household debt averaging 173% of income!

Lotus-eater

If we take average debt per household as £58000, then the average household income is around £33k. Which sounds about right to me.

So I'd agree with mitchaa, on average not bad. Its when you take the average away and look at the ones actually involved, that the figures start to look worse.

Paul_N_4

Err, did you not read this bit:

British households are now more indebted than those of any other major country in recorded history

You only have to read that to know its bad.

If the total debt was shared equally around each household, then those figures are bad enough (think pensioners on low income, unemployed, etc), but the fact is it isn't shared that way. Some people have huge debts. The only reason we see it expressed on a per household basis is for media impact. If you say, households in the UK have a total of £1.5trillion of debt, people don't really appreciate that.

All you really have to understand from that article is that households in the UK are the most indebted households of all households of all nations of all time, and you can be sure it IS bad, regardless of whether you can appreciate the stats or not.

Lotus-eater

Err yes I did, but what that should read is "Average British households are now more indebted" ...etc

Say we get rid of the top 2% of people with bad debt, how does it look now? Don't know? No one does I should think.
What about if those top (or should that be bottom) 2% go bankrupt. What would happen?
The average household debt figures would sure look alot better to start with.

Paul_N_4

Well yes, but that's a bit like saying if you took the top 2% of the most expensive houses off the house price index, the average house price figure would be a lot less, and what's the fuss all about.

What part of that debt belongs to what percenatge of the population is not relevant. Thinking of our debts on a per household figure is just media hype. The fact is we are the most indebted nation ever, and if that isn't bad, in these days of rising living costs, I'm not sure what is.

JonnyBravo

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.

There seems to be some confusion over people saying the debt seems a bit low compared to the average salary.

Reckon theres a big discrepancy in the averages here though.

The average salary is only the average of those who work.... ie it doesnt add loads of zeros for those who dont work, whereas the average debt is probably the total debt simply divided by the number of people. ie those with no job are now in the figures. Therefore it does include all those zero's.

This means the average salary is higher than it would be if it was worked out the same way as the average debt.

IYSWIM.


All in all....... it's bad!


People owe too much!
People with no income are the most fooked. Then of course there are those who owe many times these figures but at the moment have a job to serivce it all.... let's all hope we keep our jobs.

Lotus-eater

Paul_N wrote: »

Well yes, but that's a bit like saying if you took the top 2% of the most expensive houses off the house price index, the average house price figure would be a lot less, and what's the fuss all about.

Well thats true, but you can't bulldoze the top 2% of the most expensive houses can you? But the top 2% of borrowers can be made bankrupt, or go voluntarily, anyway you know what I mean.

Anyway, what would happen if you saw a headline "57% of households have no debt other than a mortgage... Shock!"

Doesn't sound quite so bad now. However further down the page it says " But of the remaining 43%, we can take out 10 % who have less than £500 on CC's, 20% who have less than £3000 for a sofa from DFS. So that leaves us with 13%. 1% are stoozers, 10% have enough money in savings to pay it off and the remaining 2% are absolutely fu**ed.

lostinrates

JonnyBravo wrote: »

There seems to be some confusion over people saying the debt seems a bit low compared to the average salary.

Reckon theres a big discrepancy in the averages here though.

The average salary is only the average of those who work.... ie it doesnt add loads of zeros for those who dont work, whereas the average debt is probably the total debt simply divided by the number of people. ie those with no job are now in the figures. Therefore it does include all those zero's.

This means the average salary is higher than it would be if it was worked out the same way as the average debt.

IYSWIM.


All in all....... it's bad!


People owe too much!
People with no income are the most fooked. Then of course there are those who owe many times these figures but at the moment have a job to serivce it all.... let's all hope we keep our jobs.

Thank you, that makes a lot of sense to me now.

so why are means being used, because they aren't really comparable?

mystic_trev

Most Pensioners have no debt and most boomers (like myself) are pretty well off.So who's saddled with most of this debt? Anyone between the ages of 21 - 48 !!!!:rolleyes:

Lotus-eater

I can't believe that the average salary worked out by the ONS isn't just by adding up all the people actually working and taking the mean.

Lotus-eater

mystic_trev wrote: »

Most Pensioners have no debt and most boomers (like myself) are pretty well off.So who's saddled with most of this debt? Anyone between the ages of 21 - 48 !!!!:rolleyes:

It would be interesting to know a further breakdown of these figures, for example, the 43% of households who share an average of £21,450 of debt without mortgages, how big are their average mortgage?
I would bet my !!!! that their mortgages are alot higher than the 57% I belong to.