The current state of debt in the UK

The current state of debt in the UK

It seems that Britain is addicted to debt and faces a terrible legacy as the recession begins to bite, Liberal Democrat Leader Nick Clegg warns, as new analysis from the Liberal Democrats shows that total personal debt has risen by £1 trillion since Labour came to power. This figure equates to an additional £10m for every hour Labour has been in government. Britons now owe £1.4 trillion in total, with debt repayments of nearly £95bn each year, equating to £3000 per second. Nick Clegg goes on to say, "The fact that Britain's economic growth has been built on a mountain of personal debt means that we are now especially vulnerable to the global economic downturn."
The above statements have been repeated verbatim from the Liberal Democrats website. But the bone of contention is not whether the Labour is responsible, but the fact that British citizens are willy-nilly being suckered into the debt trap.

The alarming rate at which we in the UK are accumulating debt goes to show total disregard of prudence in favour of popularity. Whether it is the Conservatives, Liberals or Labour, the pursuit of popularity and votes, bank politics has led to mounting debts in the UK. This has a cascading effect on personal debt as well. The situation is likely to get worse making the present situation look almost innocuous.

Consider the following figures:

• The total secured lending on homes in the UK, at the end of June 2008, stood at £1,212 billion. This has increased 7.5% in the last 12 months.

• The total lending, in the UK, in June 2008 grew by £4.0 billion. Secured lending grew by £3.1 billion in the month and Consumer credit lending grew by £0.9 billion.

• The average household debt in the UK is £9,309 (excluding mortgages). This figure increases to £21,650 if the average is based on the number of households who actually have some form of unsecured loan.

• The average household debt in the UK is £58,000 (including mortgages).

• The average owed by every UK adult is £30,424 (including mortgages).

• 424 mortgage possession claims will be issued and 302 mortgage possession orders will be made today

If the above figures do not ring alarm bells in your mind, you are bound to regret not taking steps to liquidate your debt in the near future. It is not I who is sounding the alarm but noted economists and finance barons. The faster we get rid of debt the better. As the unemployment rates rise and panic sets in the financial markets, the tools which are available at present will disappear making repayment all the more difficult for many.

The government in the UK is meanwhile reacting on predictable lines. From the measures taken till now, it is obvious that they are intent on bailing out the Banks and taking short term action rather than finding long term solutions to the problems. The fat bonuses which directors of sick banks have inked for themselves may have elicited horrific uproar from the public, but with limited response by government officials in the UK.

The way out is to clear our personal debt before it is too late. You deserve debt freedom, it is good for you, good for society and good for the World.