Personal debt up as unemployment falls

Releasing its most recent debt statistics, the charity said that average household debt in the UK in June has increased since May from £54,034 to £54,067, including mortgages, and from £5978 to £5986, excluding mortgages.

As much as £164m of interest was paid every day on personal debt in June.

The charity also found that the daily value of all plastic

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card purchases in May was £1.42bn.

The statistics showed that redundancies reached 1293 every day between March and May and that someone was declared bankrupt or insolvent every five minutes during the second quarter of the year.

Credit Action estimated that the government borrowed £3268 every second in June.

The statistics also showed that unemployment decreased by 72,000 and that the biggest drop in unemployment was within the 18 to 24 age bracket.

There was an increase in the number of unemployed over-50s, and the number of long-term unemployed also grew to 915,000 between March and May this year.

Michelle Highman, Credit Action’s chief executive, said: “It is certainly positive news that we are starting to see more people in the UK get back into work, and encouraging to see that young people are really driving these figures.

“However, the number of people out of work for more than 12 months and the increase in unemployment in the over-50s is still of great concern, especially when we see debt levels and the cost of essential living continue to rise.”

Adviser view

Colin McCallum, financial adviser of Heritable in Edinburgh, said: “All in all, the outlook is quite positive at the moment – the housing market is improving and manufacturing growth is up. Confidence is generally higher. As the economy grows, it is inevitable that debt grows as well. It is still going to be a long, slow climb, though.”