Payday loans and credit cards blamed as report warns average family will be £ 15,000 in debt by 2020

The TUC said many are relying on payday loans and credit cards – with unsecured debt per family set to hit a record £ 13,900 this year

Average family will have £ 15,000 in debt in a few years, report warns

The average family will be £ 15,000 in debt by 2020 as Britain grapples with a living standards crisis, a report warns today.

And the TUC says millions of families are “running on empty” and using payday loans and credit cards to pay for the essentials.

An analysis of official TUC figures reveals that unsecured debt per household will hit a record £ 13,900 this year.

Unsecured debt per household was £ 13,200 in 2016 – the highest figure since the financial crisis, and just below the peak of £ 13,300 in 2007.

Unsecured debt includes credit cards, bank cards, payday loans, bank, student and auto loans, but excludes mortgage payments.



The report accuses low wages and low investment of pushing the economy into a “danger zone” and the next government must tackle the crisis.








Payday loans and credit cards have been blamed for the debt crisis
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Picture:

Getty)




Wages in the UK are still worth around £ 20 a week less than before the financial crisis ten years ago. And official figures show that real wages are falling again.

The TUC believes that the growth in household debt should affect all political parties and that the next government will inherit an economy heavily dependent on household spending to maintain growth.

County court debt judgments against consumers have risen by 35% in England and Wales, and the Bank of England is investigating concerns over unsecured loans to households.

Frances O’Grady, General Secretary of the TUC, said: “Rising household debt is putting the economy in danger zone.

“We have this problem because wages have not recovered.








TUC says millions of families “run on empty”
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Picture:

Getty)




“Credit cards and payday loans help support household spending right now, but millions of families are running on empty.



“The next government must act urgently to deliver the higher wages Britain needs for sustainable growth. They must raise the minimum wage and end wage restrictions for civil servants like nurses, firefighters and midwives.

“Much more government support is needed for areas of Britain where well-paying jobs are scarce. Communities that lack good jobs today could prosper tomorrow if they get the right investments in training, transport links, broadband and decent housing.

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