Britain’s obsession with debt
Few people are looking to 2008 to be a great economic year, with problems in the financial markets threatening to undermine the entire banking sector.
Yet while news reports focus on the troubles of the big banks and lenders who rushed in where Angels feared to tread, it’s easy for media to forget the little people – us normal folks, who go about our business, trying to do right, and who will ultimately pay the real price of investment greed by the rich.
In the UK we’ve already built up a serious debt bubble, and if the housing sector starts to travel downwards, the supposed cheap equity people used to remortgage with will suddenly look like a poor deal after all.
The Citizens Advice Bureau has already reported a 20% increase in the number of people seeking debt assistance over the past year, with the overall number doubling over the past 10 years.
This isn’t surprising when you consider the awful statistics regarding UK debt:
- average consumer debt in the UK: £3,008
- average consumer debt for Western Europe: £1,558
- average household debt for the UK: £56,000
- average household debt for the UK excluding mortgages: £8,856
- 10.1% growth in the annual growth of personal debt across the UK
- the UK is now responsible for a third of all unsecured debt in Western Europe
Of course, the banking system has previously profited well from debt – after all, we’re going to see the case of bank charges slowly unfurl in court, which were responsible for over half a billion in revenues for many banks.
And what happens when little people get in debt? Big banks just offer more debt – at a steeper rate.
The situation is obvious – as a country we need to learn to manage our own debt better. The only people who profit otherwise are the banks, not the consumer.
The less obsessed Britain is with debt, the better our financial health in general.