PWC says UK 'among the most indebted in the world'

By Lucy Bower

PricewaterhouseCoopers' 'Precious Plastic 2012' report into the consumer credit industry in the UK has some rather dismal news for UK consumers. We are among the most indebted nations in the world.

Many people are feeling the pinch in their daily lives, but most of us are unaware how much debt this nation really has. Bank of England figures suggest the UK average household debt is around £8,000, excluding mortgages.

According to the report, levels of unsecured borrowing fell for the third year in a row, by more than £355 per UK household in 2011. While the nation seems committed to repaying debt, PWC warns that we're not out of the woods yet. Many people aren't sure whether they will be able to afford to repay their debt in the future, especially 25-34 year olds, with around a quarter of this age group saying they borrowed money for essentials last year. Meanwhile, less than half of 18-24 year olds said they felt confident about repaying debt in the future.

The Director of PwC’s Financial Services, Simon Westcott, commented: "Although the UK Government’s austerity drive appears to be hitting home, with households paying off an average of £355 worth of their debt in 2011, three years of austerity by UK consumers has only made a small dent in the total levels of borrowing."

In 2011, household borrowing remained stable in 2011 compared with 2010, when it totalled £1.45 trillion. However, unsecured borrowing did decline between 2010 and 2011, and outstanding balances decreased by £9.2 billion to £206.6 billion. PwC predicts unsecured borrowing will drop below £200 billion by 2013.

Image © iStockPhotos / Andrew Johnson

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