Low Savings and Rising Debt Across UK Points to Need for 2019 Financial Resolutions
£58,948: Average total debt per UK household in November 2018
£32,220: Average student debt for 2016 cohort in England
-5.7%: Change in the average real wage since pre-crash peak in February 2008
£898.71: Increase in average total debt per adult in the year to November 2018
0.88%: Average interest rate on a cash ISA in November 2018
18.69%: Average credit card interest rate in November 2018
£7,854: Average consumer credit debt per household in November 2018
26 years and 6 months: Time to pay off average credit card debt making only the minimum payment each month
-£31.5 billion: Increase in Public Sector Net Debt (excluding RBS and debt to Bank of England) in the year to November 2018
Every Day in the UK
The population of the UK grew by an estimated 1,166 people a day between 2017 and 2018.
On average, a UK household spends £3.97 a day on water, electricity and gas.
273 people a day were declared insolvent or bankrupt in July to September 2018. This was equivalent to one person every 5 minutes and 16 seconds.
12 properties were repossessed every day in Q3 2018, or one every 2 hours.
The number of people unemployed fell by 186 per day in the year to November 2018
Personal Debt in the UK
People in the UK owed £1.613 trillion at the end of November 2018. This is up from £1.569 trillion at the end of November 2017, an extra £898.71 per UK adult and £78.15 higher than the previous month.
The average total debt per household, including mortgages, was £58,948 in November. The revised figure for October was £58,799.
Per adult in the UK that’s an average debt of £30,832 in November, around 112% of average earnings. This is up from a revised £30,754 a month earlier
Mortgages, Rent and Housing
Outstanding mortgage lending stood at £1.401 trillion at the end of November 2018. This is up from £1.363 trillion a year earlier.
That means that the estimated average outstanding mortgage for the 10.9 million households with mortgage debt was £128,062 in November.
The average mortgage interest rate was 2.5% at the end of November. Based on this, households with mortgages would pay an average of £3,202 in mortgage interest over the year.
For new loans, the average mortgage interest rate was 2.1%. Using the latest figures from UK Finance, this means new mortgages would attract an average of £3,021 in interest over the year.
According to UK Finance, gross mortgage lending in November 2018 totalled an estimated £23.1 billion, down 2.0% on November 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 November 2018. For a cash ISA, this was 0.88%.
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 £2.37 in interest after tax. If they saved it in an average cash ISA, they would receive £10.42
Spending and Loans
In the year to October 2018, consumer credit increased by 7.5% according to UK Finance, while outstanding levels of credit card borrowing grew by 8.6%, a rate that has been fairly constant over the last year.
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 18.69% in November 2018. This is 17.94% above the Bank of England Base Rate of 0.75%
The Bigger Picture
The UK economy grew by 0.3% in the three months to November 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 2.3% in the year to November, down 0.1% compared with the year to October. The inflation rate has been above the Bank of England’s 2% target since February 2017.
The highest rates of inflation over the 12 months to November were in alcohol and tobacco (5.8%) transport (4.9%) and education (3.1%).