Household debt soared by a third to record levels in the past decade as workers struggled to cope with the impact of a prolonged squeeze on wages, a new report has said.
TUC analysis found that the average non-mortgage debt of a working family had hit £14,200 through an increased reliance on credit cards, bank loans, payday lending and other unsecured forms of borrowing.
Official figures released by the Office for National Statistics last week showed that median earnings in April this year were still £20 a week below where they were when the UK entered its deepest post-war recession in 2008.
The TUC said the cumulative loss to the average working family over the past 11 years had been £14,278, adding that the previous 11 year period from 1997 to 2008 had seen a “strong and consistent” increase in wages. The average worker was £32,657 better off in 2008 than they would have been if real wages stayed at 1997 levels, it said.
Pressure on family budgets was also reflected in the rising number of personal insolvencies, the TUC said. In the first three quarters of 2019, 93,042 people declared individual insolvency, meaning the total for the full year was likely to to surpass the 115,000 reported in 2018 – itself the highest since 2010.
Frances O’Grady, the TUC’s general secretary, said: “People are working harder than ever but wages have stood still for over a decade. Millions of households have been pushed to the financial cliff edge.
“Working-class families have had enough of a system that’s rigged in favour of the rich and bosses. We want better than rising debts and jobs on impossible hours that make it hard to see our loved ones.”
The TUC said Britain was facing its most important election in a generation and called on all parties to put working families first by increasing wages for everyone and banning zero-hours contracts. Other priorities must include rebuilding the NHS and other public services rather than cutting taxes for the rich, and sorting out Brexit in a way that protects jobs and rights at work, and give people a final say, it said.
