As we delve into The Money Charity’s latest financial statistics for May 2024, we gain an insight into the current state of personal finance, housing, spending, and financial inclusion in the UK. Here’s a detailed analysis based on the latest data.
Personal Debt in the UK
As of March 2024, total personal debt in the UK reached £1,843.9 billion. This staggering amount translates to an average debt of £64,296 per household or £34,372 per adult—nearly 97.4% of average earnings. Notably, net mortgage lending saw an increase of £482 million within the month, accompanied by a rise in consumer credit lending by £591 million. Concurrently, Citizens Advice Bureaux in England and Wales reported handling 244,687 enquiries in April 2024, reflecting a 19.8% increase from the previous year, signaling heightened concerns over debt management among residents.
Mortgages, Rent, and Housing
The outstanding mortgage lending stood robust at £1,620 billion at the end of March 2024. With the average mortgage interest rate at 3.51%, households with mortgages are expected to spend an average of £5,290 on mortgage interest annually. On the housing market front, HM Land Registry noted that the average house price for first-time buyers in Great Britain climbed to £236,461 in March 2024, marking a 1.8% annual increase. Meanwhile, private rental prices, as reported by the Office for National Statistics, surged by 8.9% over the 12 months to April 2024, underscoring the growing cost of living in rented accommodations.
Spending and Loans
April 2024 saw a decrease in ATM transactions by 10.2% compared to the previous year, with an average of 42.9 transactions per second. This reduction aligns with the declining number of ATMs, which fell by 5.2% from the end of 2022 to 47,711 by the end of 2023. In terms of utility spending, UK households spent £96.43 million daily on water, electricity, and gas in the fourth quarter of 2023, averaging £3.43 per household per day. Additionally, UK Finance data revealed that half of the credit card balances were accruing interest as of February 2024, highlighting the prevalent reliance on credit for managing day-to-day expenses.
Financial Inclusion
Despite the technological advancements and widespread use of banking services, financial exclusion remains a significant issue. The FCA’s 2022 report indicated that approximately 1.1 million adults in the UK did not possess a bank account, accounting for 2.1% of the adult population. Furthermore, the FCA’s Financial Lives Survey in May 2022 found that 3.1 million people predominantly used cash for transactions over the past year. Moreover, Ofcom’s 2021 data shows that 1.5 million households lacked internet access, disproportionately affecting older demographics.
The “poverty premium”—the extra cost paid by low-income households for essential services—continues to impose a financial burden, estimated by Fair By Design at approximately £4.5 million annually per typical parliamentary constituency, or over £430 per year per low-income household.
Conclusion
The Money Charity’s May 2024 statistics paint a comprehensive picture of the current economic landscape faced by individuals and households across the UK. From soaring personal debt and housing costs to challenges in financial inclusion, the data highlights critical areas needing attention from policymakers, financial institutions, and community support networks to foster a more inclusive and financially secure society. As the financial environment evolves, these statistics will serve as a crucial barometer for assessing progress and identifying persistent challenges in the UK’s economic health.
