Consumer debt hit an all-time high last year

Consumer debt hit an all-time high last year

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Yazar

Original Poster:

1,476 posts

119 months

Monday 23rd March 2015
quotequote all
But the Tory fanboys will continue to ignore what is behind this unbalanced economic 'recovery' and gaze lovingly upon the Osbourne posters lining their bedroom walls.

http://www.cityam.com/212163/borrowers-more-expose...

Chimune

3,163 posts

222 months

Monday 23rd March 2015
quotequote all
Article says 'household debt'. Explains that half is the added student loans.
OP calls it 'consumer debt'. Implies that recovery is built on high st cc debt.
OP may also have problem with Tories.



Esseesse

8,969 posts

207 months

Monday 23rd March 2015
quotequote all
Chimune said:
Article says 'household debt'. Explains that half is the added student loans.
OP calls it 'consumer debt'. Implies that recovery is built on high st cc debt.
OP may also have problem with Tories.
Does it matter? Still personal debt. And if it's not personal debt because large amounts of it is unlikely to be paid back then it's state debt that doesn't make it into the official figures.

Yazar

Original Poster:

1,476 posts

119 months

Monday 23rd March 2015
quotequote all
Chimune said:
Explains that half is the added student loans.
Half is not student debt rolleyes The total debt went up 9% last year- half of this 9% was student debt not half the £238 Billion. Your 'half' is 9 billion.

Read the PWC Report:

-While borrowers sought to reduce their debts in the years following the financial crisis, this period of retrenchment has now ended:
- people aged between 35 and 44 are increasingly depending on credit to be able to afford essential items, with close to one in five people in this age group saying they borrow simply to make ends meet.
- there is a danger of complacency as people’s confidence in their ability to stay on top of their debts increases.
- The average credit card balance stood at £1,021 by the end of 2014

http://www.pwc.co.uk/financial-services/publicatio...

Edited by Yazar on Monday 23 March 11:10

Amateurish

7,697 posts

221 months

Monday 23rd March 2015
quotequote all
Total unsecured lending is less than it was in 2008. Is this even adjusted for inflation?

The debt to income ratio is the lowest is has been for 10 years...

youngsyr

14,742 posts

191 months

Monday 23rd March 2015
quotequote all
Article said:
A two percentage point hike in the base rate would add £1,000 to each household’s interest payments on total debt every year, according to the professional services group.
So, a 2% interest rate rise, which absolutley no-one is predicting anytime soon, would increase the monthly outgoings for the entire househould by just over £80.

That's actually pretty reassuring, sure many people would feel the pinch, but it's not exactly insurmountable is it? 2.5 hours part time work a week would cover it (before tax).

Amateurish

7,697 posts

221 months

Monday 23rd March 2015
quotequote all
"Unsecured debt has bounced back to an all-time high, in cash terms, of nearly £9,000 per household by the end of 2014."

Reading the report:

2014 - £8937
2008 - £9049

Surely the OP's thread title is wrong?

http://pwc.blogs.com/files/precious-plastic-2015.p...

youngsyr

14,742 posts

191 months

Monday 23rd March 2015
quotequote all
Amateurish said:
"Unsecured debt has bounced back to an all-time high, in cash terms, of nearly £9,000 per household by the end of 2014."

Reading the report:

2014 - £8937
2008 - £9049

Surely the OP's thread title is wrong?

http://pwc.blogs.com/files/precious-plastic-2015.p...
Either way, it's definitely scaremongering. As set out above, the debt to income ratio is the lowest in 10 years and with negative real interest rates in some cases, why wouldn't you load up on debt?

wolves_wanderer

12,356 posts

236 months

Monday 23rd March 2015
quotequote all
youngsyr said:
with negative real interest rates in some cases, why wouldn't you load up on debt?
Exactly. I put a load of new furniture on an interest free credit card rather than just paying for it. I don't imagine that I am a special or unique case.

Axionknight

8,505 posts

134 months

Monday 23rd March 2015
quotequote all
wolves_wanderer said:
Exactly. I put a load of new furniture on an interest free credit card rather than just paying for it. I don't imagine that I am a special or unique case.
We do the same with large purchases and holidays - it keeps a greater amount of money in our bank account if things go pear shaped somehow and it also affords us the protection of buying things with a credit card like the inherent consumer protection.

I wouldn't be doing it at circa 18%APR though

youngsyr

14,742 posts

191 months

Monday 23rd March 2015
quotequote all
wolves_wanderer said:
youngsyr said:
with negative real interest rates in some cases, why wouldn't you load up on debt?
Exactly. I put a load of new furniture on an interest free credit card rather than just paying for it. I don't imagine that I am a special or unique case.
Not forgetting that some of us are lucky enough to be benefitting from legacy mortgages at rates below 1% and are deliberately (and logically) saving rather than paying off debt.

Obviously doesn't count for unsecured debt, but is included in household debt.

BoRED S2upid

19,643 posts

239 months

Monday 23rd March 2015
quotequote all
Amateurish said:
"Unsecured debt has bounced back to an all-time high, in cash terms, of nearly £9,000 per household by the end of 2014."

Reading the report:

2014 - £8937
2008 - £9049

Surely the OP's thread title is wrong?

http://pwc.blogs.com/files/precious-plastic-2015.p...
£9k per household doesn't sound too bad to me if this is credit cards, student loans, PCP and the likes. Most people driving a new car owe £20k on PCP anyone who's been to Uni recently will have £20,£30,£40k.

youngsyr

14,742 posts

191 months

Monday 23rd March 2015
quotequote all
BoRED S2upid said:
Amateurish said:
"Unsecured debt has bounced back to an all-time high, in cash terms, of nearly £9,000 per household by the end of 2014."

Reading the report:

2014 - £8937
2008 - £9049

Surely the OP's thread title is wrong?

http://pwc.blogs.com/files/precious-plastic-2015.p...
£9k per household doesn't sound too bad to me if this is credit cards, student loans, PCP and the likes. Most people driving a new car owe £20k on PCP anyone who's been to Uni recently will have £20,£30,£40k.
"Cash terms" means no inflation adjustment too. £9k had move value in 2008 than it did in 2014.

Ari

19,328 posts

214 months

Tuesday 27th June 2017
quotequote all
BoRED S2upid said:
£9k per household doesn't sound too bad to me if this is credit cards, student loans, PCP and the likes. Most people driving a new car owe £20k on PCP anyone who's been to Uni recently will have £20,£30,£40k.
I think a more interesting figure (which I couldn't find at a very quick glance through) would be how much debt on average per household with debt.

Strip out all the grannies that don't owe a thing, wealthier households that don't need to borrow, just look at those that have debt. Because that is where any potential problem lies. My guess is you could double that figure, which is a little more concerning.

BoRED S2upid

19,643 posts

239 months

Tuesday 27th June 2017
quotequote all
Ari said:
I think a more interesting figure (which I couldn't find at a very quick glance through) would be how much debt on average per household with debt.

Strip out all the grannies that don't owe a thing, wealthier households that don't need to borrow, just look at those that have debt. Because that is where any potential problem lies. My guess is you could double that figure, which is a little more concerning.
Agreed that would make for interesting reading. It's ok averaging it out across everyone but what is the real figure per household that has debt? A lot higher.

mjb1

2,552 posts

158 months

Tuesday 27th June 2017
quotequote all
BoRED S2upid said:
£9k per household doesn't sound too bad to me if this is credit cards, student loans, PCP and the likes. Most people driving a new car owe £20k on PCP anyone who's been to Uni recently will have £20,£30,£40k.
Is PCP included in consumer credit, or is it classed as leasing instead? Chart below seems to be suggesting that car finance is in annual decline, but it feels like more people than ever are rolling round in spanking new cars that I doubt were cash purchases?

BlackLabel said:
Wonder what comes into the 'other' category? That seems to be fuelling the growth recently, is that the student tuition fees/loans effect?

menousername

2,106 posts

141 months

Tuesday 27th June 2017
quotequote all
mjb1 said:
BoRED S2upid said:
£9k per household doesn't sound too bad to me if this is credit cards, student loans, PCP and the likes. Most people driving a new car owe £20k on PCP anyone who's been to Uni recently will have £20,£30,£40k.
Is PCP included in consumer credit, or is it classed as leasing instead? Chart below seems to be suggesting that car finance is in annual decline, but it feels like more people than ever are rolling round in spanking new cars that I doubt were cash purchases.
Isnt it the annual rate of growth slowing.... But it is still growing....from 20% ish down to 15% ish

That's still a 15% ish increase in finance vs 1 year earlier




youngsyr

14,742 posts

191 months

Wednesday 28th June 2017
quotequote all
It's possible to get 30 months interest free (with no charges) on purchases with some credit cards now, whilst bank accounts are offering up to 5% on limited credit balances.

Is it any surprise that consumer debt is increasing?!

Arguing that you'd be stupid not to increase your debt (whilst also increasing your savings to offset it) is not that much of a stretch with the current situation.

BlueHave

4,636 posts

107 months

Wednesday 28th June 2017
quotequote all
Can't say i'm at all surprised, plenty of millennials think money grows on trees and are up to their necks in debt.

Car from parents, rent from parents or house from parents so they have never really had to work hard for anything in their life so far.

If they miss a credit card payment it's ok because mummy and daddy will pick up the tab.

Not a great way to live as the safety net won't always be there.