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Friday, Oct 24, 2025

UK household debts see big increase

UK household debts see big increase

Debts excluding mortgages are on the rise in the UK, according to the Office for National Statistics.
Debts including credit card debt and personal loans rose 11% to £119bn in the two years to March 2018, according to the ONS study, which is published every two years.

Average household financial debt rose 9% to £9,400.

Much of the increase is a result of higher student loan and hire purchase debt.

"The figures are skewed slightly by the £32bn of student debts - which the vast majority of graduates will never pay back in full," said Sarah Coles, personal finance analyst at stockbroker Hargreaves Lansdown.

"However, even excluding that we're carrying £87bn in loans, credit cards, hire purchase agreements, overdrafts and arrears."

Median financial debt - taking the middle household as the norm, rather than dividing total debt by the number of households - grew 12% to £4,500. This figure excludes households with no debt and suggests these debts are not evenly spread.

The poorest 10% of households have debts three times bigger than the value of assets they own, while the top 10% have total wealth - property, pensions and other assets- worth 35 times larger than their debt.

"Not all these debts are the same: there's a world of difference between taking an affordable, low-cost loan for vital home improvements, and living on your overdraft month after month, because it's proving so difficult to make your salary stretch to the end of the month," said Ms Coles.

"But if you're one of the 44% of people who see their borrowing as a burden, it's worth taking steps to deal with your debts."

Budgeting can tighten up finances, but there are many free advisers who can help find the best way forward.
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