Household debt across the UK has reached a new peak, totalling £428bn, analysis from the Trades Union Congress (TUC) has revealed.
The TUC revealed that unsecured debt per household rose sharply to £15,385 in the third quarter of 2018, which is up £886 on a year earlier.
The union has said government austerity and years of wage stagnation are to blame for this staggering figure.
However, the TUC’s figures include student loans, while the Bank of England’s (BoE) statistics, excluding student loans, give a debt total of half the TUC’s estimate.
According to the BoE, the growth in consumer credit has been gradually slowing since the end of 2016. Whereas the union has argued that working families, on average, are worse off today than before the financial crisis, resulting in millions of households being reliant on borrowing to get by.
Unsecured debt as a share of household income had now reached 30.4 per cent, the highest the figure has ever been, the TUC reported.
The TUC arrived at its figures for unsecured debt by adding up the total amounts owed in bank overdrafts, personal loans, store cards, payday loans and outstanding credit card debts, along with student loans.
Commenting on the statistics, TUC general secretary Frances O’Grady said: “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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