The Trades Union Congress (TUC) analysis indicates that unsecured household debt, which includes loans, credit cards, and purchase hire agreements, is projected to increase by £1,400 in real terms on average. TUC predicts that by 2026, unsecured debt per household will reach a record level of £17,200, surpassing the previous high of £16,800 set in 2007. The figures are based on a combination of Office for National Statistics data for current figures and Office for Budget Responsibility predictions for the future, as reported by Sky News.
TUC general secretary, Paul Nowak, referred to it as a “debt timebomb” and emphasized that working people have been significantly impacted by rising costs due to years of stagnant pay. Torsten Bell, head of the Resolution Foundation think tank, warned that next year will be “messy,” with higher interest rates putting financial pressure on mortgage holders, as well as an increase in rent prices for renters.
In his annual New Year message, Mr. Nowak stated that Britain “cannot afford the Tories” and criticized the government for pushing families into debt while focusing on remaining in power instead of addressing the economic and living standards issues. He also highlighted that without a change, real wages won’t recover to their 2008 levels until 2028, leading to a prolonged economic stagnation that exposes working people to a cost-of-living crisis.