Our research has shown that the average household consumer debt (excluding mortgages and student loans) in the UK has reached £7,122. By combining data from the Office of National Statistics and the Bank of England we were able to look beyond this figure, to understand how debt changes across different demographics. Below you can see some of the most prominent trends that emerged from the available data.
- Key Findings
- Average Household Debt
- Average Home Loans
- Average Personal Loans
- Average Credit Card Debt
- Average Debt across Demographics
Key Findings - Updated February 2017
- Average Household Consumer Debt (i.e., Credit Cards and Personal Loans): £7,122
- Average Mortgage Debt per Household: £48,844
- Average Mortgage Debt per Household, (of households with a mortgage): £135,679
- High interest debt like credit cards and personal loans comprise 13% of total household liabilities.
- Over half of all households with financial liabilities contained a credit card with an outstanding balance – that is, an amount carried forward from the previous period.
- Half of adults in the lowest income bracket reported debts of 83% or more of annual income.
Average Household Debt by Category
According to data from the Bank of England and the Office of National Statistics, the average debt of a UK household is about £55,967 as of December 31, 2016, which is up 3.2% from 2015. Credit card debt is up 4.82% over 2015 levels, reaching an all-time high. To calculate these measures, we analyzed data collected by the government every 3 months on household debt and population, which represents the most reliable measure of consumer indebtedness in the country.
|Outstanding Total Lending (£)||Outstanding Mortgage Lending (£)||Outstanding Personal Loans(£)||Outstanding Credit Card Lending (£)||Percent Change in Credit Card Debt|
Most of a UK household's debt is home loans, which comprises of 87.3% of total household debt in the UK. Other main categories include personal loans, which includes motor finance (8.3%), and credit card debt (4.4%).
Average Home Loans
The average home loan per UK household is about £48,895. However, this number is a bit awkward, since it muddles up those with a mortgage and those without a mortgage. We think it's more useful to consider the average home loan per household, of the households that have a mortgage. According to the most recent data available from the Bank of England, around 36% of households carry a mortgage. When analyzed in this way, we come up with an average home loan per (mortgaged) UK household of £135,819. This number has gone up 30% over the past ten years, not surprising given the increase in house prices.
Average Personal Loans
The average personal loans per household in the UK was roughly £4,665 as of 31 December 2016. This figure includes loans like personal installment loans, home renovation loans, education loans, and auto loans. Somewhat like credit cards, personal loans have been a popular way of financing one’s needs in recent years. Before 2008, the category of loans comprised 10% to 11% of a household’s total debt liability. By 2016, its proportion had decreased to 8%.
Average Credit Card Debt
The mean credit card debt of UK households is approximately £2,457, according to the most recent data from the Bank of England and the Office for National Statistics. This information comes from data collected up through the end of December 2016. The "mean amount of credit card debt" considers balances that individuals above the age of 18 have on average, throughout the year.
Average Debt across Demographics
Average debt can vary significantly across different demographics in the UK, for instance by income, age, and gender. We have analyzed some of the data from the most recent Wealth and Assets Survey, conducted by the Office for National Statistics (ONS) on data collected through the year 2014, so you can see trends and differences across these segments. This dataset is the most reliable measure of individual financial liabilities in the UK. For the purposes of this analysis, "average debt" refers to unsecured financial liabilities like credit card debt and personal loans, and does not include secured debt, i.e., mortgages. In the following sections we explore these differences to see how average debt varies among the population.
Average Debt by Income
The greater the household income, the higher the outstanding debt. Individuals in the highest annual income quintile (above the 80th percentile), had a median of £4,000 in financial liabilities debt -- over three times as much as households making the least. However, as a percentage of income, those on the lower end of the spectrum carry much more debt.
|Median Individual Net Income (£)||Median Financial Liabilities (£)||Median Debt/Income Ratio|
Average Debt by Age
Median debt levels (excluding mortgages) peak for individuals who are between 25 and 34 years old - £2,800. This means that half of the indebted individuals in the 25 - 34 age bracket have at least £2,800 of debt. This age bracket is also more likely to have debt in the first place - 49% of 25 to 44 year olds have personal debt of some sort, higher than any other age brackets. Young adults and individuals over 65 years old held the least personal debt. You can see this in the following table. The last column shows how high or low the mean debt for a given age bracket is relative to the average. In particular notice how much more debt the 25 to 34 age bracket owes than average (27% more) and how little debt the over 65 age bracket owes relative to the average (50% less).
|Age||Median value of financial liabilities (£)||Percent Above/Under the Average|
|16 to 24||2,600||18%|
|25 to 34||2,800||27%|
|35 to 44||2,300||5%|
|45 to 54||2,000||-9%|
|55 to 64||2,000||-9%|
|65 and above||1,100||-50%|
Average Debt by Gender
Male householders carried significantly more personal debt then their female counterparts. The mean credit card debt held by men is £2,800, whereas women tend to hold 36% less – with an average of $1,800. Men and women are equally likely to have any financial liabilities at all - 35% for both genders. Debt to income ratios hold quite steady between men and women also - 0.16 and 0.15, respectively.