How will the Spring Statement 2022 affect you?
March 26, 2022
Ways to reduce your food bill
April 5, 2022
Let’s take a look at this month’s debt statistics which have been released by The Money Charity. You can sign up to have their monthly statistics report sent to your inbox by visiting their website.
Snapshot of UK debt March 2022
- Inflation is set at 6.2%
- There has been a 2.4 pence per litre increase in the price of unleaded petrol in February 2022 however a cut to fuel duty was announced in the Spring Statement
- Average credit card debt per household stood at £2,100 in January 2022
- The average total debt per household is £63,582 in January 2022 which is another increase
- Total unsecured debt stands at £3,743 per adult in January 2022
- 12.6% increase in the average first time buyer house price to the year to February 2022
- It now takes 21 years on average to save for a first time buyer house deposit, saving at the average rate out of the average UK income
UK Personal Debt
Remember that you can view the statistics from February 2022 here in order to compare with the March 2022 debt statistics.
- 297 people per day were declared bankrupt or insolvent in England and Wales from December 2021 to February 2022. This equates to one person every 4 minutes and 50 seconds
- Borrowers paid £123 million per day in interest in January 2022
- On average, a UK household spends £4.28 per day on water, electricity and gas which is a decrease from previous months, however this is expected to rise with the price cap increase next quarter
- 739 people per day were made redundant from November 2021 to January 2022
- 1,988 debt issues were dealt with daily by the Citizens Advice Bureau, with benefits, tax credits and debt being the reasons for needing advice and many citing the cost of living crisis as the reasons for their debt
The UK is steadily seeing the effects of the cost of living crisis hit households and we are not yet in April where many other costs are due to rise. It has been found in the statistics that UK households are turning to credit and debt in order to manage cost of living standards. It has even been reported that food banks are turning away donations of root veg because people cannot even afford the energy to cook them.
The end of February saw Russia invade Ukraine and this has had an effect on the economy due to Europe’s reliance on Russian gas exports. The fuel duty cut may not make much difference at the pumps given the continuing rising prices. Along with other cost increases, these are driving manufacturing, transport and production costs up, which inevitably will be passed onto the consumer.
What’s the answer? Raise wages? Unfortunately pay is not rising in line with inflation. Given the rise of inflation, compared to wage rises, the average worker is seeing their total real pay as 0.19% lower than before the economic crash of 2008. The Money Charity predicts that real household disposable income is expected to fall by 2.2% in the 2022/23 tax year, which is the biggest fall in living standards since OBR records began.
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.
