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UK debt continues to slow

Accumulation of UK debt slowed again in July as both secured and unsecured lending reduced.

According to debt charity Credit Action, total UK personal debt at the end of July 2009 stood at £1.457 trillion. This has slowed further to 0.3 per cent in the last 12 months, equating to an increase of around £3.4bn, compared with an increase of around £116bn at the end of January 2008. Total secured lending on dwellings at the end of July 2009 stood at £1.226 trillion.

Credit Action says that during July 2009, Britain’s personal debt decreased by about £1m every 112 minutes – in comparison, in January 2008 Britain’s personal debt increased by around £1m every 5.3 minutes.

The news comes after the Bank of England revealed that total lending in July 2009 fell to -£600m, showing a net repayment for the first time ever in the series.

The charity says the average household debt in the UK is around £9,226, excluding mortgages, but increases to £21,457 if the number of households who actually have some form of unsecured loan is included. Credit Action says if you add to this the 2009 budget figure for public sector net debt expected by 2014, then this figure rises to £116,120 per household.

Britain’s interest repayments on personal debt were £65.9bn in the last 12 months.The average interest paid by each household on their total debt is approximately £2,637 each year.

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