Debt increases by 50 per cent in a year for typical family

The typical amount of debt owed by a family has soared by almost 50 per cent when compared to this time last year.

According to insurance company Aviva Family Finances, in January 2012 the average UK family owes £7,944 in unsecured borrowing on overdrafts, credit cards, loans and other forms of credit. This represents a significant increase – 48 per cent more than the same period last year when the average debt was £5,360.

According to the survey, the increased amount of debt is equal to 32 per cent of a typical net annual income, and is due to rising inflation affecting household income.

Credit card debt makes up the greatest portion of money owed. The families questioned owe, on average, £2,314 on their credit cards.

Furthermore, it is those couples who are planning to start a family who owe the most – typically more than £15,000.

Aviva based their research on interviews conducted with 10,000 people aged between 18 and 55.

Louise Colley, Aviva’s head of protection sales and marketing, said: “While average incomes have increased over the past year, the prices of essential goods and services have also increased, meaning that families are struggling to keep up.

“Many appear to have acclimatised to this economic environment by shopping around and seeking to minimise their spending in certain areas. However, at the same time there are still a worrying number of families with insufficient savings or large debts.”

 


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