Home Business NewsBusiness Personal debt doubles in the UK, with Brits owing over £25,000

Personal debt doubles in the UK, with Brits owing over £25,000

by LLB Reporter
5th Jan 22 11:54 am

Personal finances continue to suffer under the strain of COVID-19, with the ongoing pandemic and recent increase in living expenses causing the average UK personal debt to more than double in the space of just 12 months.

The figures have been revealed in money.co.uk’s annual debt index, following extensive research by the comparison site into household debt across the UK.

Around six in ten (59.7%) consumers admitted to being in debt right now, not counting mortgages, with the average amount owed in the UK in 2021 coming in at £25,879 per person – more than double the figure in 2020 (£9,246).

Almost a third (32.24%) of debt incurred this year has been due to living expenses such as bills and food, down from 35% last year, while the coronavirus pandemic accounted for another 31.74%, down from 36% in 2020.

Notably, the number of people citing redundancy as a result of coronavirus as the reason for their debt has jumped from 7.8% last year, to 9.72% in 2021, which is a possible outcome of the furlough scheme coming to an end on September 30.

The data reveals that men (£35,013) have more than twice the debt of women (£14,911), while Brits aged between 35-44 have more debt than any other age group, averaging £53,283 per person.

According to the figures, COVID-19 continues to account for a large amount of personal debt, with the average Brit attributing £19,203 of their deficit to loss of earnings as a result of the pandemic.

When it comes to alternative causes of debt, almost two thirds of people (63.98%) blamed living expenses and the pandemic for their debt in 2021, and more than one in five (21.86%) attributed their losses to the expenditure of Christmas 2021.

James Andrews, senior personal finance editor at money.co.uk, said: “Given the challenges faced by consumers in the past 12 months, it’s no surprise personal debt is high, but for it to more than double in a year to £25,879 a person is extreme.

“Almost two years on, nearly a third of consumers still attribute their losses to the pandemic, while a fraction more say that living costs are the main cause of their debt. This will come as no surprise to anyone who has tried to change their gas or electricity supplier or filled up their car in the past few months; prices are at an all time high and show no signs of dropping in the foreseeable future.

“If you’re struggling with multiple types of debt, putting the most important debts first is key. Missing repayments on secured debts, such as a mortgage, may result in your home being repossessed while not paying council tax can result in you being put in prison. These should be top of the list.

“If you would like help prioritising, or are struggling to meet payments, there are free services available that will help you review your finances. Citizens Advice will offer free, impartial advice, or alternatively you can contact a debt charity like Step Change who will be able to offer support.”

Leave a Commment

You may also like

CLOSE AD

Sign up to our daily news alerts

[ms-form id=1]