Representative Example: Representative 1286.98% APR on a loan of £300.00 with 5 monthly repayments of £101.03 Total amount repayable £505.13 Annual interest rate (fixed) 290%
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Author: Internal Customer Services Agent
Money Statistics This Month
Ever since 2005 The Money Charity has been gathering, formulating and publishing financial based findings. Via their website www.themoneycharity.org.uk they provide an entire archive of information concerning the finances of the nation in both past and present years. As well as offering these statistics The Money Charity is a go-to resource for money based advice. Their aim is to assist consumers in effective money management and in doing so offer tools and tips to achieve just that. There have a range of different sections to their website which equips consumers with tools for everyday money management, financial products and services, debt, savings and also planning. This is why for many consumers The Money Charity has become an incredibly useful resource for managing money in their everyday lives. Returning to the statistics, these are useful to track how our spending habits and general finances are changing as consumers. The results themselves are actually published on a monthly basis and therefore there are some incredibly useful sets of information to be reflected upon. Today we will be focusing our attention on the most recent set of figures; for February 2016 and the findings are very interesting.
What stands out as prominent for this most recent set of results is the period of time the Bank of England base rate has remained at 0.5% for a rolling period of 82 months now. This combined with the fact that February’s results also outline that the average mortgage interest rate for December 2015 was 2.99%. This is supported by some interesting figures concerning unemployment in the UK and how it varies from region to region. The February findings published by The Money Charity state that whilst the unemployment rate in the South-East is at 3.7%, making it the lowest in the UK, the North-East is at 7.9% and that makes for the highest percentage in the UK currently. Whilst the interest rates from the Bank of England remain steady and the general feel for unemployment is that it is decreasing in current times, The Money Charity also states that as consumers we are saving smaller proportions of our income compared to years gone by. In fact this month’s statistics state that the average proportion of consumer post-tax income, including benefits, is at 4.4%; the lowest since 2008. Reflecting on the archived information concerning this fact will show exactly how our saving habits have adapted over the years.
As part of these statistics there are cumulative figures shown concerning consumer and household debt but given these figures are so massive in value it is worth focusing our attention on how these figures are further broken down by The Money Charity. Where in summary people in the UK owed £1.455 trillion at the end of December 2015, this is actually up from £1.424 trillion at the end of December 2014. This can be broken down to an extra £627.09 per UK adult. However, as mentioned, breaking this down further actually shows a decrease in the average debt per household (including mortgages) when comparing November 2015 at £54,078.00 and then December at £53,904.00. This in turn means a slight decrease in debt per adult with an average debt of £28,891.00 in December compared to £28,912.00 in November.
That said there is an increase in outstanding consumer lending at the end of December 2015 with the figure at £178.67 billion, compared to November 2015 at £168.8 billion. With December being the Christmas period this increase in outstanding consumer lending can be seen in lending patterns across the years. In realistic terms this can be broken down into a more approachable figure per household. In reality these new figures mean an average per household, consumer credit debt of £6,617.00 in December 2015; an extra £363.63 per household over the year. Referring specifically to credit card debt The Money Charity has published some interesting findings for the month of December 2015. The total credit card debt for December 2015 stood at £63.35 billion and per household this equates to £2,346.00. When considering this figure in terms of period of repayment, where an average rate of interest is applied it would take 25 years and 5 months to repay this debt; where only the minimum repayment was made each and every month. Given the fact that in this example the minimum repayment in the first month would be £56.00 which of course then reduces the minimum repayment in the subsequent month, it is worth remembering the period of repayment could be drastically reduced by continuing to repay the £56.00 on a monthly basis. In fact, this would reduce the period of repayment down to 5 years and 5 months.
For more information concerning the financials of UK households and consumer based spending The Money Charity website has plenty of useful and interesting findings which can be viewed. Visit the website at www.themoneycharity.org.uk for this information and greater detail on all of what has been discussed here today.