{"id":79979,"date":"2025-02-03T08:44:13","date_gmt":"2025-02-03T08:44:13","guid":{"rendered":"https:\/\/www.taxresearch.org.uk\/Blog\/?p=79979"},"modified":"2025-02-03T08:44:13","modified_gmt":"2025-02-03T08:44:13","slug":"the-coming-private-debt-crisis-will-be-rachel-reeves-fault","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2025\/02\/03\/the-coming-private-debt-crisis-will-be-rachel-reeves-fault\/","title":{"rendered":"The coming private debt crisis will be Rachel Reeves&#8217; fault"},"content":{"rendered":"<p>Financial advisers Hargreaves Lansdown reported this morning that:<\/p>\n<ul>\n<li><span data-removefontsize=\"true\" data-originalcomputedfontsize=\"14.666667\">Households with unsecured debts (like credit cards and loans) spend an average of \u00a3216 a month on them.<\/span><\/li>\n<li><span data-removefontsize=\"true\" data-originalcomputedfontsize=\"14.666667\">In debt hotspots, almost 20% of income is being spent on repaying unsecured debts.<\/span><\/li>\n<li><span data-removefontsize=\"true\" data-originalcomputedfontsize=\"14.666667\">Excluding student loans and mortgages, borrowers owe an average of \u00a32,687, but in the most debt-laden area of the country, this rises to over \u00a3<\/span><span data-removefontsize=\"true\" data-originalcomputedfontsize=\"14.666667\">5,535.<\/span><\/li>\n<li><span data-removefontsize=\"true\" data-originalcomputedfontsize=\"14.666667\">The more we earn, the more we owe \u2013 so households of the top fifth of earners have an average of \u00a34,860.<\/span><\/li>\n<li><span data-removefontsize=\"true\" data-originalcomputedfontsize=\"14.666667\">Bank of England figures released last week showed we owed \u00a3233.4 billion in consumer credit like overdrafts and cards in December \u2013 up \u00a31 billion in a month.<\/span><\/li>\n<li><span data-removefontsize=\"true\" data-originalcomputedfontsize=\"14.666667\">The annual growth rate for all consumer credit is 6.5%, and for credit cards is 8.1%.<\/span><\/li>\n<\/ul>\n<p>The implication is obvious: unsecured debt in the UK is growing faster than people's capacity to service it. That's due to low incomes, growing poverty, and the government's lack of willingness to control prices in key areas within its control.<\/p>\n<p>The consequence of that growth is obvious. A debt crisis is in the making.<\/p>\n<p>It is not a public debt crisis: public debt is not an issue in the UK, and it could not be at any current likely level of debt.<\/p>\n<p>However, Rachel Reeves' desire to transfer the supposed \u00a322 billion onto the private sector has an inevitable outcome. It is that individuals rather than the government are forced to borrow. The result is that affordable public debt becomes unaffordable private debt. and those least able to bear the costs are pushed towards financial ruin.<\/p>\n<p>Rachel Reeves chose to do this. She did not need to, but she opted for it. When this debt storm breaks, as it will, she will need to be reminded of this.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Financial advisers Hargreaves Lansdown reported this morning that: Households with unsecured debts (like credit cards and loans) spend an average of \u00a3216 a month on<br \/><a class=\"moretag\" href=\"https:\/\/www.taxresearch.org.uk\/Blog\/2025\/02\/03\/the-coming-private-debt-crisis-will-be-rachel-reeves-fault\/\"><em> Read the full article&#8230;<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[204,35,16,147,118,106],"tags":[],"class_list":["post-79979","post","type-post","status-publish","format-standard","hentry","category-economic-justice","category-economics","category-ethics","category-inequality","category-labour","category-politics"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/79979","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=79979"}],"version-history":[{"count":2,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/79979\/revisions"}],"predecessor-version":[{"id":79981,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/79979\/revisions\/79981"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=79979"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=79979"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=79979"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}