New analysis published today (Monday) by the TUC shows that household debt rose sharply over 2018, with unsecured debt (debt other than mortgages) reaching a new record high.
Unsecured debt per household has risen to £15,385 in the third quarter of 2018, up £886 on a year earlier, with millions of household forced to borrow cash to make ends meet.
According to the TUC’s analysis, total unsecured debt rose to £428bn in the third quarter of 2018 – a record high, and well above the £286bn peak in 2008 ahead of the financial crisis.
Unsecured debt as a share of household income is now 30.4% – the highest on record, and well above the level it reached in 2008 ahead of the financial crisis (27.5%).
The TUC blames years on austerity cuts and stagnant wages, as the data shows that millions of families are still worse off, in real-terms, than before the financial crash.
Whilst the Government boast about reducing the deficit, the difference between what the Government spend and how much it raises in taxes, the analysis suggests that the debt burden has been passed on to individual households.
However, in truth, public sector net debt, adjusted for inflation, has increased by more than half (53%) sine 2009/10, when Labour were in Government.
The TUC says 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. Trade unions should be allowed the freedom to enter every workplace to negotiate higher wages.”
TUC is calling on the Government to raise the minium wage, now the so–called ‘National Living Wage’, to £10 per hour as quickly as possible.