UNITED KINGDOM, L
UNITED KINGDOM, L DAVE EVANS

UK's massive household debt problem cause for concern

A "COLLAPSE” in the value of pay, alongside soaring unsecured debt means 1.6 million families are living in extreme debt in the United Kingdom, according to a new report compiled by union organisations.

Excluding mortgages, unsecured debt increased by about $82 billion to about $600 billion in the three years to 2015, according to figures from the Trades Union Congress and Unison.

The unions' joint report, Britain in the Red, said there were 3.2 million households in "problem debt”, paying out more than a quarter of household income on unsecured debt repayments.

Those in "extreme problem debt” spend more than 40% of their income on debt repayments.

The report's authors say the problem is worsening, following what they describe as a "collapse” in wages that they warn fell by more than 10% between 2007 and 2015.

TUC general secretary Frances O'Grady said: "Families can't continue relying on credit cards and loans to get by, but with the average wage still worth £40 ($70) less than before the 2008 crash, lots of families have little choice.

"Higher wages must be at the heart of the government's economic plan. We need a return to proper year-on-year pay rises, and a higher national minimum wage.

"And we need public investment in major infrastructure projects to create more well-paid jobs and build a stronger economy.”

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