Thanks to the regulators!

Thanks to the regulators!

Just finished reading a book called the Money Secret by Rob Parsons.

There is no real secret – mostly it is just good old common sense with the bottom line being that your income needs to be greater than your expenses…but what was interesting is that it is a book written from a UK perspective which is unusual in that most of the finance books are written out of the US, so it gives some interesting insights into the debt problem in the UK.

We all know what a mess the US consumer is in and how much debt there is in many of the European countries too but it was also interesting to see how bad the situation is in the UK and just how much reckless lending there has been there…the stats are frightening (see below for some of them).

Which got me thinking again about the National Credit Act in SA and about what an excellent piece of legislation it is. It might have frustrated some people who have been trying to finance assets but on the whole it has protected us from ourselves (and the debt industry) and has also shielded us from a lot of misery and pain that is the result of over-indulgence in the rest of the developed world.

So well done to the regulators – take a bow on this one and may this piece of legislation go from strength to strength! Now we just need to start getting access to better information such as that available in many other countries (see below).

Taken from

Total UK personal debt

Total UK personal debt at the end of April 2010 stood at £1,460bn. The twelve-month growth was 0.8%. Individuals owe more than what the whole country produces in a year.

Average household debt in the UK is ~ £8,761 (excluding mortgages). This figure increases to £18,252 if the average is based on the number of households who actually have some form of unsecured loan.

Average household debt in the UK is ~ £57,915 (including mortgages).

Average owed by every UK adult is ~ £30,228 (including mortgages). This is 126% of average earnings.

Average outstanding mortgage for the 11.1m households who currently have mortgages now stands at ~ £108,809.

Britain’s interest repayments on personal debt were £67.9bn in the last 12months. The average interest paid by each household on their total debt is approximately £2,695 each year. According to PwC the average household will need to spend approximately 15% of net income purely to service the interest payments arising from this debt.

Average consumer borrowing via credit cards, motor and retail finance deals, overdrafts and unsecured personal loans has risen to £4,573 per average UK adult at the end of April 2010.

Today in the UK

  • The average household debt will increase by £0.10 today (it grew by £11.11 a day in January 2008)
  • 391 people everyday of the year will be declared insolvent or bankrupt. This is equivalent to 1 person every 51 seconds during the working day.
  • Citizen Advice Bureaus dealt with 9,562 new debt problems every day in England and Wales
  • The average cost of raising a child from birth to the age of 21 is £26 a day.
  • 1,000 people are seeking some form of formal debt rescheduling every working day.
  • 230,137 unsolicited telephone calls made to UK consumers daily by debt management and personal loan companies
  • In the last 12 months consumers saved an average of £2.76 every day
  • 2,000 Consumer County Court Judgements (CCJs) were issued every day in the first 3 months of 2009
  • 107 properties were repossessed every day during Q1 2010
  • Unemployment increased by 764 people every day during 12 months to end March 2010.
  • 1,940 people reported they had become redundant every day during 3 months to end March 2010.
  • 273 young people (18 – 24s) have become a NEET (not in education, employment or training) every day during the last 3 months.
  • £378,100,000 is the amount that the Government Public Sector net debt (PSDN) will grow today (equivalent to £4,376 per second).
  • £121,640,000 is the interest the Government has to pay each day on the UKs net debt of £893.4bn. This is projected to be £114m a day (£41.6bn) in 2010 – 2011 financial year.
  • 203 mortgage possession claims will be issued and 158 mortgage possession orders will be made today
  • 363 landlord possession claims will be issued and 238 landlord possession orders will be made today.
  • The UK population is projected to grow by 1,178 people a day over the next decade
  • 21.9m plastic card purchase transactions will be made today with a total value of £1.05bn.
  • 8.1m cash withdrawals will be made today with a total value of £530m
  • The average car will cost £15.13 to run today