Monday, Nov 26, 2007
Not all debt is the same
The Edge: It's the type of debt that matters
The latest PwC survey led to alarming headlines that the average Briton is in debt to the tune of £33,000. But this lumps together all debt, including mortgages.
The person with £33,000 in credit card debt should be worried; the person with only £33,000 in mortgage debt is the most prudent borrower in the street.
Posted by little professor @ 02:16 PM (1036 views) Add Comment
10 Comments
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1. cyril said...
Don't forget that the 'average' Briton hasn't got a job, so the debt isn't uniformly distributed.
maybe think of it as £66,000 per household? BTW, average household income is just under £30,000 according to ONS.
2. george monsoon said...
My debt is about 1k at present, but only because I am in arrears with the bloody CSA
3. stillthinking said...
Is this a median value?
Surely if all money is debt then the average mean debt would be zero. Unless this ignores people in credit, or perhaps includes borrowed foreign currencies expressed in sterling.
Worse, perhaps this is the amount we are individually indebted to the banks coffers, due to their cunning trick of lending made up money with interest....
????????????????????????????????
4. cyril said...
stillthinking - I think the figure is just £1.3 trillion (total outstanding debt) divided by £50m (number of adults).
As such it is a bit simplistic to say the least.
5. C'mon Correction said...
Interesting that most reports still state we're 1.3 Trillion in debt. Debt was increasing at an alarmingly up to this figure back in about March-April time I saw it first reported that we had hit 1.3t . Surely we're close to or over £1.5 Trillion in debt?
Where can we find this information out? I don't believe UK public has not taken on anymore debt since the spring???
6. japanese uncle said...
33,000 pounds per adult including pensioners who had repaid mortgages ages ago, and school leavers!!!
Ratios of personal debt against GDP
UK: 98.9%
US: 99.5%
Japan 67.4%
Germany 67.4%
Anglo-American loan junky culture could not last long.
7. Bigyin said...
To quote creditaction.org.uk 'Britain's personal debt is increasing by £1 million every 4 minutes.' Am I the only one who pays my credit cards in full every month??
8. Yoss said...
Credit Action give the best real statistics, avg mortgage is 96k as of last month (for those with them). The real crunher is the avg interest paid on those mortgages and that factors in those on fixed rated deals. I think avg rate was 5.85 last month, but rising fast over the last 3 month and with many coming off fixed rate deals and unable to negotiate new ones (Just like the US)
That single stat alone in the whole report will show what the avg person with a 96k mortgage is paying in interest and as it is just an avg, it doesn't take alot to see what the borrowers with higher depts are starting to fork out.
With food/fuel prices spiking I expect this christmas to be one of the worst for UK retail, unless the avg sheeple convinces themself to go on one last credit binge before the party ends.
There is already a huge spike in consolidation morts, all we need now is the credit card dept to spike, and then 6mnths and its repo time.
9. littledeb said...
What a sweeping generalisation. My partner and I have no debt whatsoever and something in the region of £110k (waiting for the great HPC!).
Totally off topic to George Monsoon. Have you tried www.nacsa.co.uk (I can personally highly recommend it)
10. stillthinking said...
hmmmm.....Cyril I think so too.
So 33K is the stretched -absolute- minimum of debt using every fake device possible, dragging the rubber band of believability beyond the horizon. If I can follow my own line of thinking, some people are not in debt, but if they are not in debt, then each 'not in debt pensioner,man, woman or child' increases the total of the debtors by 33K each. I am guessing that children don't owe 33K apiece. Maybe there are some I gave you some crisps yesterday debts outstanding, but thats them out. The poor old pensioners already had their house taken and are in a home, thats them out also. ~19-23 year olds have an average of 15K debt assuming they finish with 25K debt, so they add 10K each. I don't owe any money myself so thats another 33K added to some random punter. Presumably unemployed people didn't manage to run up 33K of debt. So we are looking at 20 million people in work, which includes hard working Europeans (bless them).
Wait!
I forgot that some of the 20 million people don't owe any money also !!! Instead they have saved some money because they want to buy a house !!!!! Maybe they even saved 33K ! So thats another 66K for the debtors per wannabe house buyer !
So some slice of the population(perhaps they borrowed to speculate, who can say?) owe 98.9%(JU) of the country's GDP. Therefore, QED, in order to assist them, I must vote New Labour for ever. Also, I must go up North and invest in banks, and work in the public sector...
Fortunately I don't believe that some numpties owe 700K on dire properties while on around 33K salary (that number again!) because I have only met a couple of them so far.