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The Money Charity Report – October 2024

ended 30. October 2024

Ahead of the Budget, The Money Charity has revealed that UK households took on more debt and reduced their saving rates through the end of the summer months in order to afford everyday expenses, indicating a continuing tightening of belts for challenged budgets.

Numbers emerging from the third quarter of the year show increasing debt and reduced savings for UK households, prompted in no small part by growing difficulties in meeting the costs of day-to-day spending needs. In August 2024, total net lending to individuals and housing associations by UK banks and building societies increased by £133.5 million a day. These levels mean that total average debt per household, including mortgages, now stood at £65,665. This figure sits at almost twice the average UK salary and for many, will represent an unsustainable level of personal debt. Citizens Advice Bureaux reported that they dealt with 1,227 debt issues every day in the year to September 2024, with the most common reasons for seeking debt advice given as “cost of living increase”, “lack of control over finances” and “unemployment or redundancy”. Full report >> here <<. Any thoughts, whizz them across ASAP. 

3 responses from the Newspage community

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Editor
Stephen Perkins
Managing Director at Yellow Brick Mortgages
Households increasing debt and spending their savings to get by, in the same way the government is about to max out the country’s borrowing limits. However, unlike the government, households cannot just redefine what they consider debt to free up more headroom. These latest figures show an economy on the brink and today’s budget could start the avalanche.
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Editor
Gabriel McKeown
Head of Macroeconomics at Sad Rabbit - Substack Newsletter
Despite a barrage of leaks and policy speculation, all eyes are still on today’s Budget, which will be a litmus test for the government's ability to soothe fiscal pain rather than exacerbate it. The economic backdrop remains stark, with recent data from TMC painting a concerning picture of rising household debt and dwindling savings. A surge in borrowing has pushed the average household debt, including mortgages, to almost twice the average UK salary. Furthermore, this debt burden is exacerbated by a significant decline in savings from pre-crisis levels as households struggle to build financial resilience. Despite moderating inflation, the aftershocks of the cost of living crisis continue to impact families across Britain, with the cumulative impact of sustained price increases exerting unmanageable cost pressure. Chancellor Reeves must walk a political tightrope, attempting to balance fiscal responsibility with the need to address an ongoing financial struggle for UK households.
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Patricia McGirr
Founder at Repossession Rescue Network
UK households are drowning in debt, and the numbers don’t lie. With debt nearly double the average salary, families are scraping by, not saving for the future. Instead of more empty promises, the Budget needs to deliver concrete relief: boost disposable income, address wage stagnation, and reduce inflation’s relentless impact.

We can’t keep spinning the same tired narratives about financial resilience and thrift; this crisis is bigger than budgeting tips. It’s time to tackle the core issues; structural wage disparities and unchecked living costs or face a financial reckoning for the average British household..