Personal debt `exceeds UK`s GDP`

1 September 2008

The personal debt possessed by consumers in the UK has exceeded the country`s gross domestic product (GDP) for the second year in a row.

This is according to figures produced by accountancy firm Grant Thornton, which suggest that the total outstanding debt held amassed through mortgages, credit cards and loans has increased by 7.3 per cent over the last year.

It states that the figure owed by consumers rose to £1,444 billion over the last 12 months.

"Despite the global downturn flattening the growth of personal debt and UK GDP over the past few quarters, debt levels continue to grow at a faster rate than the income the UK generates," stated Grant Thornton`s chief economist Stephen Gifford.

He went on to suggest that, if the levels of personal debt continue to rise, there will be a significant increase in the number of personal insolvencies.

Meanwhile, figures produced by uSwitch recently suggested that UK workers now have an average of £2,491 less disposable income than they did last year.

Our initial advice on your best financial solution is free. Fees payable when continuing service is provided. Calls may be recorded for training and quality purposes.