UK consumer debt now stands at £240 billion, according to MoneySuperMarket.
73% of UK adults say they currently have some form of unsecured borrowing, such as personal loan, bank overdraft or credit card, with 33% of those admitting they rely on credit to get by every month.
The average amount owed per adult is £6,372, up 5% from £6,086 in 2016. This does not include mortgages.
Younger spenders rack up more debt, as 18% of 18-34 year olds owe more than £10,000, compared to just 5% of over 54 year olds.
Indebted Londoners owe the most, at £10,244 on average, 61% higher than the national average. However, in Yorkshire and the Humber they owe just £4,748 on average.
35% of those who have more debt than they had last year blame the rising cost of living, including transport, bills and groceries. However, 30% admit they are guilty of spending too much on luxury items, while 8% say they cannot control their spending.
Those in debt have been so for two years on average and 43% have increased their debt by up to £1,500, or they haven’t cleared any of it over the last 12 months. 5% cannot see themselves ever getting out of debt, meaning 37.6 million households will remain in the red this year.
Looking ahead, only 6% are planning to take on more debt, while 32% will try to clear it. However, 9% admit they find it difficult to live within their means, so they will use credit to get by. This increases for men, as 11% struggle with budgeting, compared to 7% of women in the red who find this is a problem.
Kevin Pratt, consumer affairs spokesperson at MoneySuperMarket, said: “Inflation rose to a 32-month high in February 2017, hitting 1.8%, which means the pressure on household spending is building. Indeed, the Chancellor said in his Budget speech last week that it would spike at 2.4% later this year.
“That means people in debt will find it harder to get back into the black. However, there are some simple steps people in debt can take to make sure they’ve got the best possible chance of paying it off. For example, it’s important to shop around to make sure you’re paying the lowest interest rate you can.
“It’s also worth consolidating multiple expensive debts onto a low-interest personal loan. Rates are the lowest they’ve been in years so, if you’re struggling to pay off unsecured debt, this might be an attractive option. Another tactic is to transfer an outstanding credit card balance that’s charging interest to a credit card that charges 0% on balance transfers.
“What matters most is that you take a proactive approach to debt, to see if you can reduce the interest you pay and make inroads into what you owe. With the UK facing an uncertain economic future, households should be taking whatever steps they can to get their finances into the best shape possible.”
