Britain poorer than thought
Over 1.6m UK households are in the grips of extreme debt, a report by the TUC has highlighted.
The Britain in the Red report says “more than 1m families with a household income below £30,000 are in extreme debt and ongoing wage stagnation is making the problem worse”.
While over 3.2m households are in problem debt about 1.6m households are in extreme debt, paying out 40% or more of household income to creditors.
The TUC general secretary, Frances O’Grady, said: “Families can’t continue relying on credit cards and loans to get by. But with the average wage still worth £40 [a week] less than before the 2008 crash, lots of families have little choice.
“Higher wages must be at the heart of the government’s economic plan. We need a return to proper year-on-year pay rises and a higher national minimum wage.”
The Unison general secretary, Dave Prentis, said: “Many of those affected by debt will be public service workers who have suffered eight years of zero pay rises, followed by a government-imposed cap on earnings.
“This report rightly draws a link between increased debt and stagnant wage growth, at a time when rent and transport costs continue to rise. Many families are having to make choices between paying the rent and feeding their kids.”