The average unsecured household debt has hit a new peak of £15,400, a study has revealed.
The report, published by the TUC, suggests that unsecured debt, such as car and finance deals, rose sharply over 2018.
In total, it found that unsecured debt per household rose to £15,385 in the third quarter of 2018 – rising £886 compared to the same period the year previous.
Across all households, this represents a record high liability of £428 billion, well above the £286 billion peak in 2008 ahead of the financial crisis.
Likewise, unsecured debt as a share of household income hit 30.4 per cent. According to the report, this is the highest it’s ever been.
Authors of the report have argued that wage stagnation is the “key reason” behind the increase in unsecured debt.
It follows recent research which found that working families are on average “worse off today than before the financial crisis”, forcing millions of households to rely on borrowing to get by.
Commenting on the report, TUC General Secretary Frances O’Grady said: “Household debt is at crisis level. Years of austerity and wage stagnation has pushed millions of families deep into the red.
“The government is skating on thin ice by relying on household debt to drive growth. A strong economy needs people spending wages, not credit cards and loans.
“Our economy is not working for workers. They need stronger rights and bargaining powers. Trade unions should be allowed the freedom to enter every workplace to negotiate higher wages.”
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