The £10,000 debt burden of the average family (and that doesn't include £1.24trillion in mortgages)

• Households suffering biggest squeeze on living standards since World War Two
• London has highest average debt of £23,600...
• ...compared to just £3,476 in Wales

Families are approaching Christmas weighed down by average debts of more than £10,500.
The huge sums – which come on top of mortgages – generate punishing interest and penalty charges at a time when people need every penny to cover essential bills for food, heat, light and transport.
However, the many who are suffering the biggest squeeze on living standards in peacetime simply do not have any spare cash to pay off what they owe.

 

Painful numbers: The average household debt, excluding mortgages, is more than £10,500 at a time when families are trying to pay for rising bills and Christmas

Similarly, with unemployment running at a 17-year high of more than 2.5million and rising, those living on benefits cannot hope to clear their debts.
The average household debt figure – covering loans, credit cards, store cards, hire purchase and overdrafts – is put at £10,603.75, according to research by Aviva.

 

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This average masks huge regional swings, detailed in a debt map produced by the company.
The figure peaks at £23,608.54 in London, where the cost of living – everything from a litre of petrol to house prices and even a basket of groceries – is more expensive.
The Welsh are least likely to be carrying large unsecured debts. Here, the average per household is a relatively prudent £3,476.45.

On the plastic: Credit cards are the biggest burden, racking up debts of £2,203 per the average £10,600

David Cameron triggered controversy at the Conservative Party conference by urging people to do their utmost to pay off their debts. ‘The only way out of a debt crisis is to deal with your debts,’ he said.While sound advice at a household level, if every family paid debts rather than spending in the High Street, the UK economy would suffer.
Aviva’s spokesman Paul Goodwin said: ‘Our research shows that the average UK family spends around a tenth of its income repaying debts.’
However, he said that most people do not seem concerned by this, which demonstrates what a normal part of budgeting debt has become.

Burden: Londoners suffer the heaviest debts - peaking at £23,608.54 - due to the high cost of living

Fact 

" Heart Finance, through the debt advisor,  are dedicated to offering you sensible advice on debt issues and advising you of the most appropriate solution which will help bring relief from debt.

According to a  survey, not many people are familiar with Debt Management Plan, 
A Debt ManagementPlan (DMP) throughHeart finance is an informal agreement between you and your creditors that enables you to restructure your debt in a way you can realistically afford to repay.

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This brought a warning from campaign group Save Our Savers, which said Britons are continuing to borrow at dangerous levels.

According to the Bank of England, total outstanding credit card debt in September was £57billion.

How the household debt figures add up

On the face of it, this was £2.1billion less than a year earlier.
However, SOS pointed out that the figure was lower only because the banks wrote off more than £3.9billion in bad debts on cards during the year.
Ten years ago, mortgage debt was £577billion and around £905million was being repaid each month.
Today, the total outstanding on home loans has leapt to £1.24trillion, while monthly mortgage repayments total more than £2.5billion despite low interest rates.
SOS argues that only higher interest rates will curtail borrowing.
This would also help savers who have seen the money earned on their nest eggs fall in the past five years.
SOS spokesman Simon Rose said: ‘Keeping base rates at an artificially low level of 0.5 per cent for almost three years has convinced people that interest rates will remain low.
‘They will have to rise at some stage, but households are clearly unprepared for the shock.
‘The continuing debt binge is being subsidised by the country’s hard-pressed savers.
‘Inflation is confiscating £43billion from savers in a year and effectively being transferred to borrowers to make their credit binge less painful.’




from the Mail Online