Average UK household debt doubled in decade

The average household debt in Britain stands at £54,000, nearly twice the level seen a decade ago, a new report shows.

According to a study by the right-leaning think tank the Center for Social Justice (CSJ), the total personal debt in Britain has reached £1.43 trillion, almost as high as the country’s national economic output.

The CSJ research, titled Maxed Out, also found that about 3.9 million British families lack enough savings to cover their mortgage or rent for more than a month.

Moreover, the report, written by former Labour Work and Pensions Minister Chris Pond, warned that poor people in the UK were hit hardest as unsecured consumer debt almost tripled over the past 20 years to £160 billion.

“A perfect storm of rising living costs, decreasing real wages, low savings and expensive credit seems to have pushed many to the edge and over a financial cliff edge,” the study said.

It was also revealed that over 5,000 households are losing their homes every year because they cannot make their payments.

“Years of increased borrowing, rising living costs and struggling to save has forced many families into a debt trap that is proving very difficult to escape,” said CSJ Director Christian Guy.

The news about soaring UK personal debt comes as Britons are struggling to cope with rising costs of living.

Recently, five of the UK’s Big Six energy companies announced hikes in customer bills for the winter.

According to a report by the National Audit Office (NAO), consumers across the UK are expected to face price hikes for gas, electricity and water until 2030, with the average energy bill due to rise by more than £700.