Business

Sharp rise in household debt levels

Household debt increased "sharply" in 2018 after years of austerity and wage stagnation

HOUSEHOLD debt increased "sharply" in 2018 after years of austerity and wage stagnation, according to a new report.

The TUC said its analysis suggested that unsecured debt - other than mortgages - reached new highs in 2018, equivalent to £15,385 per household in the third quarter of the year, up £886 on a year earlier.

Unsecured debt as a share of household income is now 30.4 per cent, the highest it has ever been, and above the level it reached in 2008 ahead of the financial crisis, said the TUC.

Government austerity and years of wage stagnation are key reasons behind the increase in unsecured debt, said the TUC, adding that working families are on average worse off today than before the financial crisis.

TUC General Secretary Frances O'Grady said: "Household debt is at crisis level. Years of austerity and wage stagnation has pushed millions of families deep into the red.

"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."

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