Households struggle with debts according to money education charity Credit Action

A household’s average debt in the UK currently stands at nearly £56,000, according to the latest October debt statistics.

The figures, released by the money education charity Credit Action, reveal the key trends and statistics regarding the UK’s debt.

Statistics show that average household debt in the UK has reached £55,822, including mortgages. If this number is added to the March 2010 budget report figure for public sector net debt (PSND) expected in 2015-16 (excluding financial interventions), then the amount rises to £106,438 per household.

Individually, the average owed is £29,546 (including mortgages), which equates to 122 per cent of average earnings.

Overall, total UK personal debt at the end of August 2011 stood at £1,451 billion. If this is broken down it equates to individuals currently owing nearly as much as the entire country produced between Q2 2010 and Q1 2011.

Liz Dunscombe, Director of Project and Partnership Development at Credit Action, said of the figures: “That the October debt statistics show some concerning indicators will come as no great surprise.

“Additional pressure has been placed on some on family budgets due to recent increases in redundancies and long-term unemployment.”

Furthermore, it appears that every day 334 people will be declared insolvent or bankrupt.

With regard to employment statistics, the consensus continues to look fairly bleak – as increases in redundancies and long-term unemployment are reported. According to the figures, 849,000 people have been unemployed for longer than 12 months. This represents a rise of 6.4 per cent over the past year and means that daily redundancies have increased to 1,775 in the three months to the end of July.

According to The Insolvency Service, there were 30,513 individual insolvencies in England and Wales in Q2. However, this does not take into account the number of people turning to informal insolvency solutions like DMPs – this figure is thought to stand at 700,000.

R3 (The Association of Business Recovery Professionals) also estimate that there may be 961,000 individuals who are struggling financially but have not sought help and so are at risk of finding themselves in formal insolvency procedures.