Bankruptcy fears for families as average debt hits £60,000

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Britons are facing a growing threat of bankruptcy, as latest figures show the average household is almost £60,000 in debt.

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Re: Bankruptcy fears for families as average debt hits £60,000

Bankruptcy fears for families as average debt hits £60,000


By Myra Butterworth, Personal Finance Correspondent

Last Updated: 8:27am BST 22/08/2008





Britons are facing a growing threat of bankruptcy, as latest figures show the average household is almost £60,000 in debt.
25 million households in UK are carrying an average debt of £58,461
Experts warned that despite the credit crisis and stricter conditions on lending, cash-strapped Britons are suffering from years of indulging on relatively cheap borrowing.
Figures show the total outstanding UK consumer debt - including credit cards, loans and mortgages - has increased by 7.3 per cent to £1,444 billion over the past year, up from £1,346 billion in June 2007.
There are almost 25 million households in the UK, therefore carrying an average debt of £58,461.

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Stephen Gifford, Grant Thornton's chief economist, said: "The figures clearly illustrate the continuing problems of growing personal debt levels in the UK. If the property market and economy continue to weaken, the current levels of personal debt will be unsustainable and there will be a marked increase in personal insolvencies."
He added: "UK economic growth has chugged along quite nicely thanks to rising consumer spending which has largely been on credit. While most of the debt is perfectly serviceable and secured on dwellings, the rising number of insolvencies and repossessions is testament to this process having a negative outcome for an increasing number of individuals."
A total of 24,553 people went insolvent during the three months to June this year, according to figures from the Insolvency Service.
Grant Thornton said that the number will climb in the next six to 12 months as the fallout from the credit crisis shows its true colours.