The True Story of Debt in the UK

bendix

Radiantsoul wrote: »

The implication that debt is bad is not one that many people would agree with. If we are to assume that economic growth will continue for another generation then those levels of debt might be sustainable.

Structured and strategic debt is not necessarily bad, in the right hands and with the right paydown strategy in place.

Unsecured debt levels at this level, to pay for TopShop handbags and Benidorm holidays, with no easy way to repay for so many people, is an unmitigated disaster.


Edited to say: I can't believe I just thanked a post from smeagold ;-)

Arcaine

Given that the article contradicts its own figures, saying 46% of personal debt os on credit cards, then in the make up below says 52% or am I missing something?
Are the average debt figures of £26k and £58k with or without mortgages? If it does should we take into account the value of those assets to offset the debt?
The £2.73 a day saved does this include employers pension contributions and interest on savings etc, and comparing that against cash withdrawals per day, is errrr a little silly, these kind of "plucked from the air" shock statistics are neither helpful or meaningful.

bendix

Arcaine wrote: »

Given that the article contradicts its own figures, saying 46% of personal debt os on credit cards, then in the make up below says 52% or am I missing something?
Are the average debt figures of £26k and £58k with or without mortgages? If it does should we take into account the value of those assets to offset the debt?
The £2.73 a day saved does this include employers pension contributions and interest on savings etc, and comparing that against cash withdrawals per day, is errrr a little silly, these kind of "plucked from the air" shock statistics are neither helpful or meaningful.

The average HOUSEHOLD debt including mortgage is £57-58k.

The average HOUSEHOLD unsecured debt, excluding mortgage is £17-£18k

StevieJ

nicko33 wrote: »

The total wealth of households in Great Britain in 2006/08 was estimated at £9.0 trillion.
Property and pension wealth contributed the most to wealth, accounting for over three-quarters of the total.

http://www.statistics.gov.uk/downloads/theme_economy/wealth-assets-2006-2008/Wealth_in_GB_2006_2008.pdf

Don't cloud the issue with perspective :eek:

Arcaine

bendix wrote: »

The average HOUSEHOLD debt including mortgage is £57-58k.

The average HOUSEHOLD unsecured debt, excluding mortgage is £17-£18k

The 17-18k was the average unsecured debt for someone on a debt management plan. The OP has misquoted.

StevieJ

AD9898 wrote: »

What's interesting is IR's have fallen off a cliff in the last 2 years, yet the graph shows the 2 highest peaks there, imagine what'd it would have been if rates had of been normal.

Insolvencies would have close to millions, house prices down 50% I reckon. The thing is if it would have happened, we could have been on our way to rebuilding again now, instead we are just a zombie, stagflating, desperately trying to keep the plates spinning.

Two issues here.

1) Worse recession since the 30's

2) Change in bankruptcy law.

Niksan

I'm glad I'm below average, but that means someone else is above average. Which I'm guessing is the differences between the 46%-52% as far as CC debt is concerned.

StevieJ

Arcaine wrote: »

The 17-18k was the average unsecured debt for someone on a debt management plan. The OP has misquoted.

So the 17-18k relates to the those in the worst debt position, not everyone?

shop-to-drop

So when are these debts going to cause house prices to fall so we can get a bigger one? I'm getting fed up of waiting.

Radiantsoul

bendix wrote: »

Structured and strategic debt is not necessarily bad, in the right hands and with the right paydown strategy in place.

Unsecured debt levels at this level, to pay for TopShop handbags and Benidorm holidays, with no easy way to repay for so many people, is an unmitigated disaster.

It is not clear that current levels are really a problem though. Whilst more people are going through formal insolvency procedures the wider issue is presumably how much debt actually ends up being bad. Whilst banks bad debt provisions have been rising we need to bear in mind where we are in the economic cycle. I am not sure the level will be structually higher.