Average household debt in the UK rose very slightly in the month of March, according to new figures from Credit Action.
The average household debt (including mortgages) stood at £53,995 in March – up from a revised £53,994 in February – revealing people are still struggling with their finances.
However, this does at least show the rate of growth for household debt is slowing down, as it has been increasing at a higher speed in previous months.
Borrowing also saw some stabilisation during the month, with the average amount rising from a revised £3,207 in February to £3,208 in March. People are clearly finding it hard to get out of their overdrafts and pay off credit card debt but the rate of borrowing is at least showing signs of improvement.
One alarming factor that the report found was the increase in plastic card purchases in February, with 31.7 million transactions made every day with a total value of £1.585 billion. In January, this figure was just 28 million transactions.
Based on the March figures, the UK's total interest repayments on personal debt over a 12-month period would have been £59.9 billion, which is equivalent to £164 million a day. This means UK households would have paid an average of £2,274 in annual interest repayments, which is lower than the figure provided last month – £2,299.
Outstanding personal debt stood at £1.423 trillion at the end of March, which is up from £1.409 trillion at the end of the same month last year. Unfortunately, people still owe nearly as much as the entire country produced during the whole of 2012.
Some 274 people are being declared insolvent or bankrupt every day, the equivalent to one person every five minutes 15 seconds.
As times get increasingly difficult, many people in the UK will turn to debt solutions to get themselves back on track. With a rise in the amount people owe, several individuals are taking up debt consolidation loans in order to manage their money more effectively.
By James Francis