A nation living on the never-never: policy solutions to reduce Britain's personal debt mountain

Document type
Smith Institute
Date of publication
1 December 2011
Poverty Alleviation Welfare Benefits and Financial Inclusion
Social welfare
Material type

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This report looks at the problem of growing personal debt, which has doubled over the past decade to £1.6 trillion, and is forecast to rise to £2.1 trillion by 2015 (taking the average household debt to £84,365). Total lending is now more than the country’s total output, with stressed unsecured borrowing reaching record highs. In theory, the UK’s reliance on debt-fuelled consumption and mortgage debt should not be a problem. But, as the authors in this report demonstrate, the burden of servicing large debts creates serious problems for many individuals and families when real wages are falling, unemployment rising, inflation increasing and property values uncertain. This report places the policy spotlight on these concerns as well as offering new thinking on debt advice and credit management.

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