The distribution of unsecured debt in the United Kingdom: survey evidence

Quarterly Bulletin 2003 Q4
Published on 19 December 2003

By Merxe Tudela and Garry Young of the Bank's Domestic Finance Division. 

The Bank recently commissioned a survey asking people about their unsecured borrowing and whether it is a burden to them. This article summarises the main results. As of October, 34% of respondents had some form of unsecured debt, over and above that which they expected to pay off at the end of the month, and the average amount owed was around £3,500. Some people owed much more than the average: 26% of those with some debt owed more than £5,000. Around 10% of borrowers said that their unsecured debt was a heavy burden to their households, similar to earlier surveys. For purposes of comparison over time, the questions were based on those used in earlier surveys. The evidence suggests that the proportion of people with some debt has not changed since at least the late 1980s. While the average amount borrowed by debtors has increased, since 2000 the extra borrowing has been concentrated among those with household incomes above £17,500. Despite the rise in average debt levels in recent years, the proportion of people who consider their debt not to be a burden has increased. But, the amount borrowed and the share of unsecured debt accounted for by those who consider it a heavy burden have both increased.

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