Britain’s growing debt trap
Across the UK debts are spiralling out of control, with more and more people and families getting caught in a debt trap.
Levels of unsecured (non-mortgage) household debt – including credit cards, loans, overdrafts, rent-to-own, and debts to doorstep lenders – are now at £239 billion, higher than before 2008.
Nearly 9 million people are now ‘severely indebted’, spending more than a quarter of their incomes on debt repayments, and the poorest people are being hardest hit. Just under half of these households have incomes of less than £15,000 per year.
Low wages, insecure work, welfare cuts and rip-off lending lay behind the debt trap. Growing numbers of people simply can’t make ends meet, and are being forced to borrow from rip-off, irresponsible lenders just to cover basic needs.
The debt trap is driving mental health problems, homelessness and family breakdown, and sinking poor families and communities deeper into poverty.
We urgently need the government to take action to end spiralling debts and the growing debt trap. That’s why we’re calling on the government to:
- End rip-off lending by capping interest rates and charges for loans, credit cards, overdrafts, rent-to-own and doorstep lending
- Set out plans to help the families stuck in the debt trap.
This October we’re organising a nationwide week of action on the debt trap. We have an Action Kit for all those who want to do something, with plenty of action ideas.