Gareth McNab & Natalie Williams
Household debt continues to increase

Household debt has reached a new high, according to figures released yesterday from the TUC. Their research says that the average debt per household rose to £15,385 in 2018.

The figures include student loans. By comparison, the Bank of England says consumer credit is still growing, but at a slower pace.

Both sets of figures are worrying, because they show that consumer credit (cards, loans, overdrafts) is increasing. For the more affluent, it indicates an escalating reliance on credit as part of managing finances, but for those facing poverty, it’s a concerning sign of an increasing reliance on credit to cover the basics. StepChange report that the number of people paying essential household bills with credit cards and overdrafts is on the rise, with 9.3 million people doing so in 2017.

In 2016 the Money Advice Service found that more than 16 million people in the UK have savings of less than £100. More recent research found that one in five British adults would find it difficult to pay an unexpected bill of even as little as £20. An increasing number of people are living without the means to respond easily when a crisis comes.

What can we do? Be aware of people in our communities who might be struggling. If possible, help. We spoke to someone just a few days ago who was finding their personal finances crippled by credit card repayments, with the interest continuing to mount. Sometimes we can be the answer ourselves. Or we can point to organisations such as CMA and CAP, who can help people struggling with overwhelming debt, and Acts435, who raise small amounts of money to help people with a specific need.

We can also keep challenging our own attitudes. It's easy to fall into believing that credit card debts and overdrafts are the folly of those who manage their money badly. But the reality is that essential living costs have risen significantly alongside real terms wage cuts for those in work and even deeper cuts for those on benefits.

If you'd like some prayer pointers about debt or some suggested actions, click here.