U.K. Personal Debt Levels Reach 140% of Income

“Personal debt levels reach a record 140% of income,” says the Daily Telegraph. In 1980, the paper explained, the level was only half as high. The Telegraph might have been speaking of almost any country in the English-speaking world. The leading financial regulator in the United Kingdom, the FSA, warned yesterday that debt levels were becoming dangerously high. Mortgage repossessions rose 65% last year. “There is a risk that consumers could be unprepared for a weaker economic environment…,” said the FSA.

What has happened in the Anglo-Saxon economies? Several things: First, the financial industry in these countries has been extraordinarily innovative and aggressive – always finding new ways to lure people into debt. Second, these economies are more closely allied with the United States and the U.S dollar. The steady loss of purchasing power in the dollar, and the threat of consumer price inflation, has led people to spend rather than save. Finally, the Anglo-Saxon culture, along with the English language, has become the imperial standard. But it is a late-stage imperial culture, dominated by a ‘get it now‘ emphasis on money, status and material well-being.

Bill Bonner

Bill Bonner

Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America’s most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind Markets and Money.

Bill Bonner

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2 Comments on "U.K. Personal Debt Levels Reach 140% of Income"

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As a banker’s nightmare I’ve only ever once considered accumulating a credit rating worthy of a large loan. To do this I paid large deposits with several retailers and paid the debt off in a month when I could’ve easily paid cash initially; in the end I decided against taking out a loan on anything. And guess what? I’ve decided there’s more pleasure to be had in saving up to buy something you own completely than borrowing against future earnings for a material item that might disappoint. Over the years my income increased and I was offered lines of credit… Read more »

Does the 140% include home mortgages? If so, that doesn’t seem that bad. If not, then it’s pretty damn scary.

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