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Taking credit action: charity reveal new shock statistics about uk consumer debt

The consumer charity Credit Action has revealed new statistics for July on consumer debt and behaviour in the UK, with some of the statistics suggesting that the UK's recession is still quite deep.

The charity, which predominantly aims at educating people and establishing awareness on the disadvantages of debt, mainly focuses on making sure people remain in credit. The organisation has been collaborating recently with the Consumer Credit Counselling Service recently. The would obviously affect consolidation loans.

Statistics released by the website recently comes as the charity has been filing monthly reports on how UK consumer debt is progressing throughout the recession.

One of the most shocking statistics published has proven to be that UK personal debt has propelled to nearly £1.5 trillion – a number which when distributed across all UK households results in each and every adult in the UK owing over £30,000.

This figure alone indicates that the debt situation in the UK is out of control. As the precise figure, £30,480, is 32% more than the average wage, it seems that only small contributions are being made to resolve the UK's debt problem as interest further compounds the situation that the recession has made.

The report gave enlightening information on what is one of the principle reasons for the amount of debt increasing in the UK. As one in 33 people in the UK are unemployed and out of work, it has been suggested that this increasing rate of unemployment has meant consumers have been struggling to keep up with repayments.

Interest has been seen to play a very significant role in debt repayments and has resulted in advice to consumers to pay off as much debt as possible. With low interest rates, it seems that this advice has been heeded by consumers – who paid off a record £8.1 billion of debt off mortgages earlier this year.

This advice came after it was revealed that the average household pays £2,650 towards debts each year. Resultantly, consumers who are paying only the minimal repayment towards their debts can find that they are barely covering their interest and are perpetually in debt.

One piece of good news that has been drawn from the statistics is that lending has slowed significantly as lenders batten down the hatches for a very bumpy ride in the recession. The amount of credit available to consumers dried up in previous quarters and this is evident in statistics published recently.

Lending has slowed, with personal debt increasing by £1 million every 5.3 minutes in January 2008 on average. Compared to May 2009, this rate has stooped dramatically, with £1 million being added to the tally of debt every 77 minutes – a reduction of more than 90% in less than 18 months.

The latest report can be described as a mixed bag of progress and lack of progress to say the least. Less optimistic news for UK consumers who are wallowing in debt is the amount of homes that are being repossessed in each quarter: an average of 142 a day totalling more than 12,780 in the first three months up to April 2009.

Credit Action believes that this number has increased to an average of 178 a day from April 2009 and will remain that high until the year's conclusion, meaning that more than 48,000 homes are yet to be repossessed in the last nine months of 2009.

Reception has been mixed based on individual circumstances – however, one conclusion is evident: Britain's debt situation has meant that so far, the country has still got a long way to go before any end to the recession is near.

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