Personal debt balloons to over £5,000 each

Unsecured personal debt has grown by almost 50% since 1997 and now stands at £5,330 per person, data from the Office of National Statistics has revealed.

The data has raised great concern with incomes growing by only 23% over the same period.

Personal debt has grown twice as fast as incomes since 1997 and has increased by £1,790 each. Unsecured debt is as large as over a third of the average person&#39s annual income.

The statistics build on worrying July figures that show the average annual household debt, including mortgages, outstrips average annual income by 30%. In 1997, it was only 5% higher.

Opposition parties have warned that borrowers must seriously review their finances to encire they can meet their repaymet obligations.

Vince Cable MP, Liberal Democrat shadow chancellor, says: “With interest rates set to start rising imminently, the ticking debt time bomb is now set to explode. Many people who have borrowed to the limit, are going regret pushing their debts up so high.

“With more and more of people&#39s income being soaked up by personal debt and mortgage repayments, the boom time for lenders may well be over. People who are mortgaged to the hilt, or have borrowed to the limit, are the ones who will suffer.”