Unsecured household debt is set to rise by over £1,600 this year as families continue to struggle with the cost of living crisis, according to new TUC analysis published today.
The analysis shows that unsecured debt (loans, credit cards, purchase hire agreements) is on course to increase by 9.4% (£1,660) in real terms, on average, per household this year.
The TUC says that this is the largest annual rise – in cash terms – since records began in 1987.
The union body says the findings “make a mockery” of government claims that “their plan is working”.
The TUC’s analysis excludes student loans.
Separate TUC polling – carried out by YouGov – shows that millions are continuing to struggle with the cost of living:
4 in 10 say they’ve cut back on essentials like food and utility spending this year. And this number rises to nearly 1 in 2 for women.
6 in 10 say they have cut back on non-essential spending like dining out and entertainment since the beginning of the year.
Around a fifth of respondents say they have fallen behind on household bills this year – a number that rises to over 1 in 4 for people aged 18-24.
Over quarter say have they taken out debt (loans, credit) to cover unexpected bills since the start of the year. This number shoots up to over a third for adults aged 25-49 – when lots of families raise children.
The TUC says working people have been left brutally exposed to rising costs after years of pay stagnation.
UK workers are on course for nearly two decades of lost living standards with real wages not forecast to recover to their 2008 level until 2026.
The TUC estimates that the average worker would now be £14,700 better off if their pay had kept up with pre-crisis real wage growth trends since 2008.
TUC General Secretary Paul Nowak said:
“These findings show out of touch this Conservative government is with people’s struggles.
“While the Tories boast about their plan working, households across Britain are being pushed further into debt.
“No one should have to rely on credit cards and loans to make ends meet. But after 14 years of flatlining wages – and the worst cost of living crisis in generations – many families are at breaking point.
“The Tories economic record speaks for itself. Pay packets are still worth less today than in 2008 with working people on course to end this parliament poorer than at the start.”
