Personal debt in the UK has more than doubled over the last 12 months, with the average Brit owing £25,879 in 2021 – up from debts of £9,246 in 2020.
According to money.co.uk’s annual debt index, six in 10 Brits are now in debt, excluding mortgages.
Almost a third (32.34 per cent) of the debt accrued last year was due to living expenses such as bills and food. The coronavirus pandemic accounted for another 31.74 per cent of debts.
Covid was blamed for the rising debt levels across the board, with the average Brit attributing £19,203 of their deficit to loss of earnings as a result of the pandemic.
9.72 per cent of those surveyed said that they had been made redundant as a result of the coronavirus, which has forced them to take on more debt. In 2020, just 7.8 per cent blamed coronavirus redundancy for their debt.
Almost two thirds (63.98 per cent) said that living expenses and the pandemic accounted for their debt in 2021, while one in five (21.86 per cent) said that they had borrowed more money ahead of Christmas 2021.
“Given the challenges faced by consumers in the past 12 months, it’s no surprise personal debt is high, but for it to more than double in a year to £25,879 a person is extreme,” said James Andrews, senior personal finance editor at money.co.uk.
“Almost two years on, nearly a third of consumers still attribute their losses to the pandemic, while a fraction more say that living costs are the main cause of their debt. This will come as no surprise to anyone who has tried to change their gas or electricity supplier or filled up their car in the past few months; prices are at an all time high and show no signs of dropping in the foreseeable future.”
Londoners were most likely to end 2021 in debt, with almost three quarters (72.72 per cent) of people in the Greater London region owing money by the end of the year.
Outside of London, people living in Belfast had the highest levels of debt, with more than two thirds (67.86 per cent) ending the year in the red. However, they have the lowest average debt figure per person at £6,381.
Southampton saw the highest level of debt per person, with residents reporting average losses of £62,301.
More than three in 10 Brits (31.75 per cent) attributed their debt to credit cards, which is down from 34.47 per cent last year.
Personal loans represented 15.6 per cent of last year’s debt, while overdrafts accounted for 15.6 per cent, car loans 10.95 per cent and white goods payment plans made up 10.35 per cent.
Meanwhile payday loans and product payment plans accounted for 27.45 per cent of debt, according to the statistics.