Household debt hits record high

Tuesday 14th January 2020 16:45 EST

At present the country is facing several crisis on different fronts. Although the economy is sluggish but the elite and the higher classes are racking in millions, for them the economy is booming. On the other hand the country is confronted with homelessness, child poverty, increase in food banks, housing shortages, NHS crisis, knife crime, and to cap all this, the household debt has shot up exponentially. Families have to 'borrow to scrape by’. It’s for paying the rent, heating the home and feeding the kids.

Average UK household debt hit a record high of £14,450 last year. Total debt excluding mortgages reached £407bn in the third quarter of 2019, up 31% on levels reached during the financial crisis in 2008, according to analysis by the Trades Union Congress (TUC). Debt levels as a proportion of household income have also risen above their 2008 peak for the first time in the past year, reaching 27.5% of earnings, the TUC found. Frances O’Grady, TUC general secretary, said the increase was “not about keeping up with the Joneses,” with years of wage stagnation and a growth in insecure jobs blamed.

The TUC said 3.7 million people were currently in precarious work in the UK, including an estimated one million jobs on zero-hours contracts. Sue Anderson, head of media at the StepChange debt charity, said it received more than 330,000 requests for help in the first half of last year alone. She said borrowing to meet basic needs was becoming “ever more entrenched,” with more than 12 million adults thought to be covering household essentials with credit last year.

It is a crucial for the government to urgently look into this matter and address this debt issue of reviewing the wages structures and kick starting the economy which had been held back because of the uncertainty of Brexit. Otherwise the situation would deteriorate badly.

Baldev Sharma

Rayners Lane, Harrow

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