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July 12, 2023
The Money Charity released their debt statistics for June 2023 with the headline being that the ongoing cost of living crisis is making the gap between advantaged and disadvantaged even bigger.
Whilst the cost of living crisis is having an effect on nearly everybody, it is the most disadvantaged households that are being hit the hardest. Whilst minorities and disadvantaged groups are being further squeezed, we are also told that the gender pay gap is also becoming more prominent. Financial resilience which is an indication of how far away a person/household is from the breadline if they lost their income, shows that the average household is only 19 days away from it. Working women are 14 days away from it, compared to a working man who is 28 days away from it.
Snapshot of UK debt June 2023
- Inflation rate stays at 8.7%
- There has been another decrease in the price of unleaded petrol during May 2023 by 2.2 pence per litre
- Average credit card debt per household stood at £2,336 in April 2023 which is an unsurprising increase as more people turn to credit
- The average total debt per household is £65,498 in April 2023 which is a slight decrease since last month
- Total unsecured debt stands at £4,010 per adult in April 2023 which is another increase
- 3.3% increase in the average first time buyer house price to the year to April 2023 which has decreased, possibly because of the slowdown of the housing markets
UK Personal Debt
Remember that you can view the statistics from last month here in order to compare with the June 2023 debt statistics.
- The average total debt per household, including mortgages, was £65,498 or £34,580 per adult. This is around 103.3% of average earnings
- 330 people per day were declared bankrupt or insolvent in England and Wales from March to May. This equates to one person every 4 minutes and 22 seconds
- 8.3 properties were repossessed every day in January to March, however we are expecting this statistic to decrease given the government’s pledge that repossessions should be delayed by 12 months
- 1,033 people a day reported they had become redundant between February and April
- Government debt increased by £657 million per day in the three months to May 2023
It seems that Britain is becoming a place where inequality is allowed to grow. Further research from The Money Charity has shown up some worrying statistics related to the gender pay gap. At a time when pay between genders is at the forefront (plus everything associated with it), it is disheartening to see some of the figures.
78% of women are more likely to view the cost of living crisis as a constant source of worry as opposed to 68% of men. Women are cutting back on luxuries and reducing essential spending where possible. Essential appointments such as dental trips are being postponed due to the cost, according to 19% of UK households. Other groups are also reporting difficulties: 80% of disabled people receiving their cost of living payment report that it is not enough to cover the increased cost of their essentials. 52% of workers from minority backgrounds report that the government support would not be enough to support them through the next six months, as opposed to 45% of white workers.
The Chief Executive of The Money Charity has gone on record to say that what the government has put in place in terms of support is not enough. The cost of living crisis is outstripping each of their support packages and more needs to be done, rather than just a sticking plaster approach. They are calling for those in power to “commit the country to a comprehensive strategic roadmap towards UK-wide Financial Wellbeing, with a fully back and costed place, bought into by all relevant stakeholders” and we agree.
If the past year has had a negative impact on your financial situation, or you are facing increasing debt costs over the next few months, feel free to call us for a discussion on what debt solutions could be available to suit your personal situation.
