London, Nov 8 (IANS) Private debt in Britain has reached a record $1.9 trillion, equating to 30,000 pounds, or more than $37,000, for every adult, a charity said on Monday.
The average debt for each man and woman is equal to more than 113 per cent of average annual earnings, Xinhua news agency quoted the London-based organisation, The
Money Charity, as saying.
The charity said the figure has grown over the 12 months to September and is expanding at the fastest rate since the financial crisis in 2008, adding debt fell for a few years after the crisis, but has begun to rise since 2013.
The average debt for each person, said the charity, means that the amount owed on property mortgages, loans and credit cards is now 82 per cent of what the entire economy produces in a year.
Around 87 per cent of private debt is money borrowed to buy homes and is secured against property. But the 51 million adults in Britain also owe an average of $4,641 in unsecured debt like credit cards and personal loans.
"Borrowers should be aided by the Bank of England's decision to cut the base rate to 0.25 per cent in August. This should bring down the interest rates people pay, but so far does not seem to have impacted hugely on the rates that all consumers face," said a spokesman for The Money Charity.
"With the possibility of inflation and rate rises just around the corner, people should be getting ready for a time when this debt mountain is more difficult to deal with."
Michelle Highman, Chief Executive of The Money Charity said: "When we see these record levels of debt, it's important to remember that there is nothing necessarily wrong with borrowing. It is a good way of paying for things you can't afford upfront like university or your house. But with interest rates so low at the moment, it's easy to think that high levels of debt are manageable."
Latest figures from the Bank of England show the amount owed by private individuals stands at 1.503 trillion pounds, or almost $1.9 trillion. In January 2000, the figure was 605 billion pounds ($751 billion).