UK population grappling with £5bn “black hole” of debt

People in the UK are struggling with almost £5bn of debt, according to leading think tank Demos.

The report, titled “The Borrowers”, says that household debts amounting to over £200 per household are made up of rent arrears, unpaid council tax, and household bills.

While mortgages are generally the largest debts people face, the report gives them a relatively low “harm rating”, which is based on their financial, emotional and social consequences. At the other end of the scale, Demos highlighted payday loans, door-step lenders and utility bills as being particularly high on their harm rating.

The report’s author, Jo Salter, said: “There’s a £5bn black hole in official debt statistics and our research shows just how arrears on rent, council tax and utility bills often have just as big a negative impact on people as payday lending.

“Deciding which forms of debt are “bad” and need stronger regulation should not be based on industry definitions. It should be judged by looking at what types of debt cause people the most stress, disrupt their relationships with those around them, and undermine their capacity to help themselves.”

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