Alarming UK Debt Statistics & Facts for 2023
With the global economy facing one crisis after another, countries worldwide are accumulating more and more debt. In this overview of the most recent debt statistics for the UK, we’ll examine how much money the Brits owe — collectively and individually. We’ll also explore how indebted the UK government and the country’s businesses are. Finally, we’ll take a closer look at the state of credit card debt and student loan debt in the United Kingdom.
Top 10 Debt Statistics for the UK
As of September 2022, people in the UK owed $2.22 trillion.
The average household in the UK owed $78,300 in Q2 of 2022.
In October 2022, the average adult in the UK owed $41,997.
In Q3 of 2022, England and Wales saw 27,927 individual insolvencies.
In Q1 of 2021, UK businesses owed a total of $1.71 trillion.
The UK saw 5,595 business bankruptcies in Q3 of 2022.
The UK government debt totaled $2.99 trillion as of Q2 of 2022.
The UK government deficit in Q2 of 2022 totaled $54 billion.
As of mid-2022, the UK’s outstanding student debt totaled $246.1 billion.
As of September 2022, the UK’s credit card debt totaled $76.7 billion.
UK Personal Debt Statistics
As of September 2022, people in the UK owed $2.22 trillion.
Estimated at £1.82 trillion in local currency, personal debt went up by 35.7% year-over-year from £1.34 trillion ($1.64 trillion) in September 2021. The number — which comprises both secured (mortgages) and unsecured debt — is the highest it has been since at least 1994. The data from September 2022 also reveals that the total annual interest rate on personal debt in the UK would have been £50.84 billion ($98.1 billion), equating to £139 million ($169.3 million) per day.
(The Money Charity)
The average household debt in the UK totaled $78,300 in Q2 of 2022.
At £64,286, it translated to 133.9% of the average household income in the country. While the level of household debt relative to the average income has decreased from its most recent peak of 135.8% in Q2 of 2021, the ratio is still very high. Moreover, experts predict that the total debt in the UK could reach £2.45 trillion ($2.98 trillion) by 2025, meaning that the average household debt would go up to £85,096 ($103,647) — a 32.4% increase over just three and a half years.
(The Money Charity, Statista)
In October 2022, the average personal debt in the UK stood at $41,997.
The average — £34,480 in local currency — equates to 107.2% of the average earnings per adult. Secured debt (primarily mortgages) accounts for the most significant share of the debt at 88.7%, while unsecured debt (including credit card debt) accounts for the remaining 11.3%. Statistics show that the interest rate on this debt in the previous 12 months would have been about £961 ($1,170.5) per person, which equates to 2.9% of an average Brit’s annual earnings.
(The Money Charity)
The unsecured debt in the UK totaled $250.66 billion in September 2022.
The term unsecured debt refers to all debt that isn’t covered by collateral (e.g., unpaid medical bills, utility bills, and credit card debt). Totaling £205.8 billion, the UK’s unsecured debt breaks down to £7,405 ($9,019) per household and £3,891 ($4,739) per person. Researchers note that unsecured debt in the UK saw a massive decline amid the global pandemic, as people started spending more responsibly. However, it resumed rapidly increasing beginning in October 2021.
(The Money Charity, UK Parliament)
In Q3 of 2022, England and Wales saw 27,927 individual insolvencies.
According to debt statistics from 2022, this number included 20,635 individual voluntary arrangements (IVAs), 5,579 debt relief orders (DROs), and 1,713 bankruptcies. And while the total number of insolvencies in Q3 of 2022 marked a 5% decline compared to the previous quarter, it was still 2% up over Q3 of 2021. Overall, between October 1, 2021 and September 30, 2022, 1 in 405 adults (24.7 per 1,000 adults) in England and Wales entered insolvency.
(UK Government)
Scotland recorded 2,069 individual insolvencies in Q3 of 2022.
Debt statistics reveal that Scotland saw the biggest increase in individual insolvencies — their number was up by 8% over the same quarter in 2021. It’s important to note that Scotland has different rules regarding bankruptcy, so the data isn’t directly comparable to that from other regions in the UK. Still, of the 2,069 individual insolvencies in 2022’s third quarter, 1,480 were protected trust deeds, while 589 were bankruptcies (also referred to as sequestrations).
(UK Government)
At 437, Northern Ireland had the fewest insolvencies in Q3 of 2022.
Looking at debt data for the UK, Northern Ireland saw the fewest individual insolvencies in 2022’s third quarter — only 437. While this was up by 6% over 2021’s third quarter, it accounted for just 1.4% of the 30,433 insolvencies recorded across the UK during this period. Of the total Q3 number for Northern Ireland, 373 were IVAs, 46 were DROs, and 18 were bankruptcies.
(UK Government)
UK Business Debt Statistics
In Q1 of 2021, UK businesses owed a total of $1.71 trillion.
Between the end of 2019 and 2021’s first quarter, UK companies have increased their debt by £79 billion ($96.2 billion) for a total of £1.4 trillion. This increase of about 6% was described as “moderate” by the Bank of England, especially considering that the global pandemic and the resulting financial crisis disrupted many companies’ cash flows. However, this also led to a sizable increase in the debt-to-earnings ratio — from 322% in late 2019 to 349% in March 2021.
(Bank of England)
The UK saw 5,595 business bankruptcies in Q3 of 2022.
While this marked a small 0.6% decrease from 5,629 bankruptcies in Q2 of 2022, UK corporate debt statistics show it was the quarter with the second-highest number of business bankruptcies since the end of 2019. The number of companies entering bankruptcy has been on a steady rise since Q1 of 2021, when it reached a multi-year low of 2,374. Additionally, as of August 2022, 11% of UK companies reported they were facing a moderate-to-severe risk of insolvency.
(Trading Economics, Office for National Statistics)
UK corporations faced a huge borrowing cost crisis in late 2022.
After massive tax cuts in mid-September 2022, UK businesses saw an unprecedented increase in interest rates on long-term government bonds. According to UK debt statistics, the rates, which stood at 3.5% in mid-September 2022, shot up to 5% just two weeks later. This prompted corporate borrowers to start selling off their bonds in droves. To prevent further financial turmoil, the Bank of England promised to buy £65 billion ($79.2 billion) worth of these long-term bonds.
(The Guardian, Reuters)
UK Government Debt Statistics
UK government debt totaled $2.99 trillion as of Q2 of 2022.
At nearly £2.44 trillion in local currency, the government debt equals 101.9% of the country’s gross domestic product (GDP). Since 2020’s third quarter, when the global pandemic’s effects were first registered, the United Kingdom has gradually increased its debt — from £2.16 trillion ($2.66 trillion) at the start of the pandemic. However, as a percentage of the country’s GDP, the debt is well below its most recent peak of 107.6% in Q1 of 2021 and on par with Q2 of 2022.
(Office for National Statistics)
The UK’s debt relative to the GDP is 17.9% higher than that of the EU.
The UK national debt statistics put the country’s debt at 101.9% of the GDP, whereas the 27 European Union (EU) countries’ combined debt equals 86.4% of their combined GDP. Looking at the countries’ individual debts relative to their respective GDPs, the UK is currently in seventh place. Greece is the most indebted EU country at 182.1% of its GDP, followed by Italy (150.2% of the GDP), Portugal (123.4%), Spain (116.1%), France (113.1%), and Belgium (108.3%).
(Office for National Statistics)
The UK government deficit in Q2 of 2022 totaled $54 billion.
Also referred to as net borrowing, its current value of £43.9 billion equals 7.2% of the UK’s GDP. While that doesn’t seem high in relation to the country’s debt, statistics for 2022 reveal that the total is up from just £12.2 billion ($15 billion) or 2% of the country’s GDP in 2022’s first quarter. Unsurprisingly, the government deficit most recently peaked in Q3 of 2022, in the middle of the pandemic’s first wave — it totaled £76.6 billion ($94.2 billion) or 14.6% of the country’s GDP.
(Office for National Statistics)
The UK’s net borrowing is 380% higher than the European Union’s.
Whereas the combined deficit of the 27 EU countries — expressed as a percentage of their cumulative GDP — currently stands at 1.5%, UK debt statistics put the country’s deficit at 7.2% of the GDP. If we look at individual countries’ government deficits, we’ll find the UK in second place, behind Spain at 7.6% of its GDP. The list of countries with the highest deficit also includes France (4.4% of the GDP), Cyprus (4.2%), Slovenia (3.6%), Italy (3.1%), and Malta (2.9%).
(Office for National Statistics)
UK Student Debt Statistics
As of mid-2022, the UK’s outstanding student debt totaled $246.1 billion.
The value of outstanding student debt has consistently risen over the last decade. Totaling £200.1 billion, the student loan debt at the end of the 2021/2022 academic year was 12.8% higher than the £177.4 billion ($218.2 billion) recorded a year before. At £181.6 billion ($223.4 billion), England held the largest share of the total debt, leaving Wales (£7.1 billion; $8.7 billion), Scotland (£7 billion; $8.6 billion), and Northern Ireland (£4.4 billion; $5.4 billion) far behind.
(Statista)
The average debt per UK graduate student totaled $36,340 in 2022.
Estimated at £29,545, the average debt saw a 5.6% increase from £27,965 ($24,397) in 2021. Graduates of English universities held the highest average debt at £45,150 ($55,534), up by 0.9% over 2021. At £33,830 ($41,611), Wales saw the largest annual increase in average student debt (+23.1%), placing it second. Meanwhile, students in Northern Ireland owed £24,360 ($29,963; +0.6%), and those in Scotland owed £14,840 ($18,253; -1.8%) per person.
(Statista)
In 2021/2022, England alone allocated $24.55 billion for student loans.
A look at student loan debt statistics for the UK shows that approximately 638,000 students of English universities received loans in the academic year 2021/2022, costing the government a total of £19.96 billion in local currency. By 2026/2027, analysts predict that the number of English students benefiting from student loans will go up to 697,000, bringing the local government’s costs up to £24.18 billion ($29.74 billion) — a 21.1% increase over five years.
(UK Government)
Credit Card Debt in the UK
As of September 2022, the UK’s credit card debt totaled $76.7 billion.
Calculated at £62.4 billion, the total credit card debt saw a 7.76% increase since the beginning of 2022. The September 2022 total breaks down to £2,245 ($2,761) per household and £1,180 ($1,451) per person. At its current level, the total UK credit card debt would take 5 years and 1 month to clear if debtors repaid £60 ($73.8) every month. However, with only the minimum required payments, an average credit card would take 25 years and 8 months to be repaid.
(The Money Charity)
Credit card borrowing in 2022 grew at the highest rate in 17 years.
Amid the rising inflation and the resulting financial crisis, credit card borrowing in the UK jumped by £740 million ($910 million) month-on-month, which was 13% higher than the same time the previous year. According to the Bank of England, the annual spike in credit card borrowing rates was the highest since October 2005. Experts attribute this rise to Ofgem’s August 2022 decision to raise the energy price cap (the maximum price it can charge consumers) by 80% over 2021.
(The Guardian)
24.6% of Brits use credit cards to cover the basic cost of living.
The high cost of living is a major factor in the rising average credit card debt in the UK. While 24.6% of Brits use credit cards to cover everyday expenses, 16.35% use them to earn rewards points, 14.91% to get cash back on their purchases, and 11.65% to repair their credit scores. Asked what they pay for with their credit cards, 29.81% cited groceries and living expenses. Common credit card expenditures also include retail shopping (19.63%) and holidays (19.55%).
(Credit Connect)
UK Debt Statistics: The Takeaway
Amid the global pandemic and the impending energy crisis, the UK is facing a severe debt problem. In September 2022, the total personal debt was 37.3% higher than the year before, and the country saw some 30,000 individual insolvencies in the year’s third quarter alone.
With the government and corporate debt in the trillions of pounds, debt statistics for the UK leave little room for optimism. The rising inflation has forced millions of Brits to rely on credit cards to make ends meet, increasing their already massive debt in the process. And though the growing student debt might not be as big of an issue as in the US, it is nevertheless concerning.
Debt Statistics UK FAQ
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