UK household have an unsecured debt of 13000 pounds which shows a significant rise from previous data. The figures were released from the Office for National Statistics. The research was done based on three months till the end of September 2016. The amount, which is exclusive of mortgage loans shows a figure that stands high for a UK household. The research included student loans which was one of the reasons that the amount had vigorously gone up. Student loans have been increasing in UK and that can be seen in this recently acquired data. The total unsecured debt is 349 billion pounds which was divided by the total number of UK households to get an average figure. Since December 2008 this is the highest figure recorded.
The borrowing of each UK household has significantly gone up. But the interest rates still remain low and is said to remain so for quite some time. But it is possible that changes in the financial activities in 2017 can effect the debt repayment of few households even if most of them remain at a position to repay it now. The financial circumstances are hard to predict and it could be a big hit to the households.
Bank’s Chief economist, Andy Haldane said,”Interest rates are still very low, and are expected to remain so for the foreseeable future, so there are fewer concerns on debt servicing than there were in the past”. UK households have decent jobs to keep them going. But there has been no increase in the wages of the working groups and they solely depend on this. The government needs to make efforts to increase the wages or introduce a substitute form of welfare for the households to help them bring down their borrowings. Borrowing are mainly done using credit cards and loans for financing cars. Students who leave University owe a total of 40,000 pounds as student loans. Though it has not become an issue it is advised by few economists to bring down these borrowings.