The Money Stats February 2019 – Households Remain Under Financial Stress Despite Some Signs of Improvement

Striking Numbers

  • 24 years: How long it would take to save the average first time buyer deposit at the average UK savings rate out of the average UK income
  • -5.9%: Change in the average real wage since pre-crash peak in February 2008
  • £935.34: Increase in average total debt per adult in the year to December 2018
  • 0.92%: Average interest rate on a cash ISA in December 2018
  • 18.66%: Average credit card interest rate in December 2018
  • 26 years and 5 months: Time to pay off average credit card debt making only the minimum payment each month
  • £59,261: Average total debt per UK household in December 2018
  • £7,863: Average consumer credit debt per household in December 2018
  • £30.8 billion: Increase in Public Sector Net Debt (excluding RBS and debt to Bank of England) in the year to December 2018

Every Day in the UK

  • Net lending to individuals and housing associations in the UK grew by £138 million a day in December 2018.
  • 989 people a day reported they had become redundant in October to December 2018
  • 371 people a day were declared insolvent or bankrupt in October to December 2018. This was equivalent to one person every 3 minutes and 53 seconds.
  • Borrowers paid £140 million a day in interest in December 2018
  • The number of people unemployed fell by 274 per day in the year to December 2018.

Personal Debt in the UK

  • People in the UK owed £1.625 trillion at the end of December 2018. This is up from £1.576 trillion at the end of December 2017, an extra £935.34 per UK adult, £81.72 higher than the previous month.
  • The average total debt per household, including mortgages, was £59,261 in December. The revised figure for November was £59,105.
  • Per adult in the UK that’s an average debt of £30,995 in December, around 112.8% of average earnings. This is up from a revised £30,914 a month earlier.

Mortgages, Rent and Housing

  • Outstanding mortgage lending stood at £1.409 trillion at the end of December 2018. This is up from £1.369 trillion a year earlier.
  • That means that the estimated average outstanding mortgage for the 10.9 million households with mortgage debt was £128,823 in December.
  • The average mortgage interest rate was 2.48% at the end of December. Based on this, households with mortgages would pay an average of £3,195 in mortgage interest over the year.
  • For new loans, the average mortgage interest rate was 2.15%. Using the latest figures from UK Finance, this means new mortgages would attract an average of £3,133 in interest over the year.
  • According to UK Finance, gross mortgage lending in December 2018 totalled an estimated £21.1 billion, up 4.7% on December 2017.

Savings and Pensions

  • In Q3 2018, households saved an average of 4.3% of their post-tax income, including benefits. This compares with 4.4% in Q3 2017. From 2000 to 2015, the savings rate fluctuated mostly in the 6-10% range, with a post-crash peak of 12% in Q3 2009.
  • The average interest rate for an instant access savings account, not including bonus interest payments, was 0.25% in December 2018. For a cash ISA, this was 0.92%.
  • If someone on the average salary saved 4.3% of their income in an average instant access savings account for a year, they would receive £2.36 in interest after tax. If they saved it in an average cash ISA, they would receive £10.87.

Spending and Loans

  • In the year to November 2018, consumer credit increased by 7.1% according to UK Finance, while outstanding levels of credit card borrowing grew by 7.9%, slightly down on the rate of growth in early 2018.
  • In Q3 2018, households in the UK spent £108.8 million a day on water, electricity and gas, or £3.97 per household per day. On a seasonally adjusted basis, this was similar to Q2 2018.
  • The average interest rate on credit card lending bearing interest was 18.66% in December 2018. This is 17.91% above the Bank of England Base Rate of 0.75%.

The Bigger Picture

  • The UK economy grew by 0.2% in the three months to December 2018, a fall from the 0.6% growth in the third quarter of 2018, according to the latest estimates from the Office of National Statistics.
  • The CPI (Consumer Prices Index) 12 month rate stood at 2.1% for the year to December 2018 and 1.8% for the year to January 2019, down 0.5% compared with the year to November. January 2019 was the first time inflation has been below the Bank of England’s 2% target since February 2017.
  • The highest rates of inflation over the 12 months to January 2019 were for alcohol and tobacco (4.2%), transport (3.2%), education (3.1%) and communication (3.1%).

About The Money Charity:

The Money Charity is the UK’s financial capability charity. Our vision is that everyone has the ability to be on top of their money as a part of everyday life. We empower people across the UK to build the skills, knowledge, attitudes and behaviours to make the most of their money throughout their lives.