Britainís total household debt, comprised of unsecured and secured liabilities, will soar from its current value of £1.574 trillion, to a staggering £2.251 trillion by the end of 2019, the Office for Budget Responsibility (OBR) has identified in its latest forecast within the Budget.
Total household debt in the country is currently at its largest value since 2009, with the rise in house prices, low interest rates, the increased availability of mortgages and the stagnation of wage rises being cited as the primary reasons for why people have taken on higher levels of debt in the past half decade.
The OBR have estimated that total household debt in the UK rose by 2.8% since 2009, though they now expect this rate to accelerate in the upcoming half decade, with household debt forecasted to rise by a monumental 43% by 2019.
This will mean that by the first quarter of 2019 each house in the UK will owe over £2,423 then they do now, under the OBRís forecasts and official data.
Alarmingly, other data produced by the OBR illustrated that 79 houses are repossessed each day, as total mortgage debt for the average household continues to rise, standing at £54,472 last month. With insolvency statistics scarcely better- a person is made bankrupt or insolvent every 5 minutes and 25 seconds- a number of groups have now begun to call for higher levels of financial advice to be made available to the public, as well as tighter lending controls.
Michelle Highman, Chief Executive of The Money Charity, said: ìThe significant rise in the OBRís estimated UK household debt over the next 5 years is likely to be driven by a hike in house prices (and therefore mortgages) and households saving a little less. However what it highlights for certain is the continuing need for support systems to be in place as individuals & households take on bigger and bigger debts.î
Mrs Highman called for wider publication of money advice services to be instigated, in order to give young people and borrowers quality levels of education and help on how to manage their finance. She argued that ensuring this would mean that people would ëstay on topí of their debts, and be well placed to manage them moving forward in the future.
ìPeople need to be equipped with the skills and knowledge to manage their money well and stay on top of their debtsî.
She also outlined that producing a budget would be the best way for households to try and counteract monetary
problems in the future, and suggested that people look for money charities and debt advice forums online, whenever they begin to suffer from financial difficulties.