Interesting Personal Debt Statistics

The Money Charity was originally called Credit Action and was set up in 1994 to assist people in the UK that had got into trouble financially and provided advice about their debt problems. Over a period of time, it has moved towards providing guidance to people about things like how to better deal with their finances and has probably helped some people avoid getting a bad credit rating.

The charity also provides some interesting statistics about personal debt here in the UK some of which we provide details on below: –

Total UK Personal Debt

As at the end of October 2015, personal debt in the UK amounted to £1.456 trillion and that is an increase when compared with October 2014 when the figure stood at £1.42 trillion. The increase actually works out at an extra £706.71 for every adult in the UK.

Average UK Household Debt

As at October 2015, the average household debt including mortgages stood at £53,918 and that is an increase on the previous month when it stood at £53,755. As at October 2015, the average debt in the UK for every adult was £28,826 with this being a slight increase on the previous month’s figure of £28,739.

Credit Card Debt In The UK

As at October 2015, people had credit cards with a collective outstanding amount of £62.8 billion. That equates to a figure of £2,324 per household. Rather worryingly, if you only made the minimum monthly repayment on your credit card for which you were charged an average rate of interest it is estimated that it would take over 25 years to repay the debt. In the third quarter of 2015, banks and building societies wrote off £552 million in respect of credit card debt.

Some people with an adverse credit history may still be able to apply for a poor credit credit card online although it is possible that the interest rate will be higher than what is normally charged. Therefore, it would be preferable if the outstanding balance were cleared every month.

Increasing UK Debt

Back in July 2015, the Office for Budget Responsibility forecast that household debt in the UK could get as high as £2.551 trillion by the first quarter of 2021. That would be a huge increase in comparison to October 2015.

Amount of UK Consumer Credit Lending

The amount of consumer credit lending that was outstanding as at the 31st October 2015 amounted to £177.08 billion. Twelve months ago the figure was £167.9 billion so there has been a big increase. That actually equates to an average of £6,558 for every household and £3,506 for each adult in the UK as at October 2015.

If you have a debt problem then the Citizens Advice Bureau may be able to provide guidance

The Citizens Advice Bureau provide support for people with debt problems.

Bankruptcies/CCJs/Debt Advice

On a daily basis, 209 people are declared either bankrupt or insolvent and 2,330 CCJs are issued. There are 25 property repossessions every day. In the three months to September 2015, the Citizens Advice Bureau became involved with 4,097 new debt cases.

We are sure that you will agree that some of the above debt statistics for the UK are rather concerning. There are obviously an awful lot of people that have bad credit and it will no doubt take several years for many of them to get out of financial difficulty. You can see additional statistics at www.themoneycharity.org.uk/money-statistics.

Highlights Of The “Credit Card Market Study – Interim Report”

The Financial Conduct Authority (FCA) has recently published its interim report entitled “Credit Card Market Study”. We thought you would find some of its highlights of interest especially if you have been struggling to maintain your credit card minimum monthly repayments or are in default resulting in you getting a bad credit history.

The idea of this study was to enable the FCA to clearly understand the credit card market and establish if it was operating satisfactorily from the customer’s perspective.

A lot of people get a bad credit rating becuase they have not been able to maintain the repayment of their credit card satisfactorily.

There would appear to be far too many people that are struggling to repay their credit card balances.

It is interesting that in the region of 60% of adults in the UK have a minimum of one credit card – that is about 30 million customers. However, about 46% of credit card customers have two or more credit cards.

It is concerning in the report to read that there are so many people that are struggling with credit card debt. For instance, 600,000 cardholders have had their credit card classed as “charged off”. A further 1.5 million cardholders had missed a minimum of 3 repayments and were or had been in arrears.

Another interesting statistic is that 2.1 million cardholders had, on average, utilized at least 90% of their credit card limit for in excess of 12 months during which period they were still charged debit interest.

It was found that 1.6 million cardholders were making the minimum payment on their credit card balance every month. You may well be aware that if this were to happen it could take many years before you repay your credit card debt. In fact, the study shows that it will take 5.1 million credit card accounts in excess of 10 years to be repaid making the assumption that they borrow no more money on their cards and keep to their present patterns of repayment.

The FCA concluded that, as far as the customer goes, competition was working in a reasonable manner within most of the credit card market.

However, a couple of the FCA’s other conclusions were that credit card providers tend to loose money on customers that go into default but those customers that make a high % use of their limits or regularly make the minimum payment each month are profitable to the provider. In respect of defaulting customers, credit card companies have systems in place to help people. In the latter two situations, there would appear to be minimal inclination to offer such customers any form of assistance.

The final report on the “Credit Card Market Study” is due to be published in early 2016. It will be interesting to see what recommendations, if any, are made.

It is worth remembering that if you only make the minimum monthly repayments on a regular basis with the likes of the Vanquis Visa Credit Card or the Black Diamond Visa Credit Card that tend to provide credit cards for those people with a bad credit history then you will probably end up paying more interest than if you made minimum monthly payments on a credit card issued by one of the high street banks as the former ones usually charge a higher rate of interest.

Internet Hackers Steal £Millions From Some UK Bank Accounts

It has been reported that criminals have been able to withdraw millions of pounds from bank accounts in the UK through the Internet. Apparently, very sophisticated techniques are being used to do this so customers are being advised to be on their guard and take suitable precautions.

Cyber criminals have been able to access monies in the bank accounts of some customers that use online banking.

Some users of online banking have fallen foul of cyber criminals.

It is claimed that e-mails are being sent to many people that contain attachments or links that, when opened, infect computers. This allows the criminal to be able to access the password and login details of those customers that use online banking and thus gain access to their bank account. One form of malware is known as Dridex.

If you use online banking to manage your bank account then you will be aware that you can do many things such as set up standing orders and make one-off single payments to third parties.

Internet users are being advised not to click on attachments or links in e-mails that they are unsure about to reduce the likelihood of their computers being hacked. They should also make sure that they have up to date security software on their computers and report any instances of potential fraudulent activity on their bank account to both their bank and Action Fraud. Assistance can also be found on the websites of GetSafeOnline and CyberStreetWise.

Apparently, the National Crime Agency (NCA) is working closely with other international law agencies such as the Federal Bureau of Investigation (FBI) in the USA.

So, if you use online banking to manage your day to day banking needs, do be careful when opening e-mails that you are unsure about and avoid clicking on their attachments or links. If you do not, you could find that monies have been taken out of your bank current or savings accounts. Many people keep thousands of pounds in their bank accounts so sizeable sums could be involved.