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Private Debt in the UK
a panel presentation by Emma Bryn-Jones to the
Rosa Luxemburg Foundation / EURODAD Conference
Alternative Solutions to the Debt CrisisFriday 7th March 2014
8.8 million over-indebted adults
2.6
2.8
3.4
low wage & benefit dependent families
optimistic young workers & worried working families
struggling students, first time workers, stretched families & uncomfortable retirees
undoubtedly vulnerable to low / reduced income
distressed, distracted and / or fi nancially vulnerable
principally distressed that risk taking has backfi red
SOURCE: MONEY ADVICE SERVICE, INDEBTED LIVES, NOVEMBER 2013
Credit Outcomes Distribution
£5,000 £10,000 £15,000 £20,000 £25,000 £30,000 £35,000 £40,000 £45,000 £50,000 £55,0000
1
2
3
ExcessDeficit
Credit agreement
17%
17%
66%
social tenant private tenant
owner occupier
Comparing tenure of over-indebted people with English Housing Survey
22%
28%
50%
social tenant private tenant
owner occupier
SOURCE: MONEY ADVICE SERVICE, INDEBTED LIVES, NOVEMBER 2013
SOURCE: COMMUNITIES & LOCAL GOVERNMENT, ENGLISH HOUSING SURVEY 2011-12
Payday loans as a percentage of unsecured lending
1%
99%payday loans unsecured lending
11%
89%
unsecured lending secured lending
SOURCE: OFFICE OF FAIR TRADING, PAYDAY LOAN MARKET INVESTIGATION, JULY 2013
total lending = fashion?unsecured lending = cosmeti cs?
“The Independent”17 October 2013
The cost of living crisis afflicting millions of Britain’s families is so bad that it is creating a personal debt crisis too. The prices families have to pay keep on rising faster and faster than the wages they are paid. And, as a result, the market in payday lending has doubled in just four years.
http://www.independent.co.uk/news/uk/politics/labour-leader-ed-miliband-declares-tax-war-on-payday-lenders-8884944.html
Gender and age of over-indebted adults
male
female
0% 10% 20% 30% 40% 50% 60% 70%
35%
64%
18-24
25-34
35-44
45-54
55-64
65+
0% 5% 10% 15% 20% 25% 30% 35%
21%
22%
32%
21%
3%
1%
SOURCE: MONEY ADVICE SERVICE, INDEBTED LIVES, NOVEMBER 2013
Experiences of debt collection by gender and age
male
female
10% 15% 20% 25% 30% 35% 40% 45% 50%
39%
43%
25-39
40-59
60+
0% 5%10%
15%20%
25%30%
35%40%
45%50%
39%
46%
26%
SOURCE: ZERO-CREDIT, THE DEBT RESOLUTION FORUM 2013 CLIENT SURVEY
Solutions
• Optimise the collective, not your bias
• Empower the collective from within
• Make market forces count