Payday Loans and UK Debt in 2021/22

The UK national debt is the total amount of money the British government owes to the private sector and other purchasers of UK gilts.

Public Debt in the United Kingdom is principally the debt of the central government.

In 2005 the UK National Debt was less that £0.5 trillion. But then came the worldwide financial crisis of 2008 and subsequent recession. The National Debt increased rapidly and went over £1 trillion in 2011. At the end of the 2015-16 fiscal year, the National Debt went over £1.5 trillion.

In terms of Gross Domestic Product the UK National Debt in 2005 was about 38% of GDP.

But in the last ten years, in the wake of the Crash of 2008 and subsequent recession, the National debt has doubled to over 80% GDP however, it shows signs of levelling out as a percentage of GDP.

In June 2018, UK public sector net debt was £1,792.3 billion equivalent to 85.2% of GDP (as per ONS)

Budget deficit - annual borrowing

This is the amount the government has to borrow per year.

  • In 2013/14 net borrowing was £98.5bn or 5.7% of GDP (excluding public banks)
  • In 2014-15 net borrowing was £88 billion (4.9% of GDP)
  • In 2015-16 net borrowing was £71.7 billion (3.8% of GDP)
  • In 2016-17, net borrowing was £39.4 billion
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Deficit down but debt up?

One potential confusion is that politicians may say the budget deficit is coming down. But, at the same time, national debt is rising.

If annual borrowing falls from £80bn to £50bn, the annual deficit is lower. But, at the same time, the national debt (total debt) can still be rising.

Debt as % of GDP

The most useful measure of national debt is to look at debt as a % of GDP. For example in 1950, UK national debt was £640bn (at 2005 prices) - but this was 250% of GDP.

Recent history of UK National Debt

After a period of financial restraint, from mid 1990s, public sector debt as a % of GDP fell to 29% of GDP by 2002.

  • From 2002 - 2007, national debt increased to 37% of GDP. This increase in debt levels occurred despite the long period of economic expansion; it was primarily due to the government's decision to increase spending on health and education. There has also been a marked rise in social security spending.

2008-2018 - public sector debt has increased sharply because of:

  • 2008-13 recession (lower tax receipts, higher spending on unemployment benefits) The recession particularly hit stamp duty (falling house prices) income tax and lower corporation tax
  • These cyclical factors have also exposed an underlying structural deficit. (Deficit caused by spending greater than tax, ignoring cyclical factors)
  • Financial bailout of Northern Rock, RBS, Lloyds and other banks
  • From 2011-2018, the pace of increase in the public sector debt has slowed due to the government attempts to reduce the budget deficit. The government has announced strict spending limits

How does the UK with other countries?

Although 80% of GDP is high by recent UK standards, it is worth bearing in mind that other countries have a much bigger problem. Japan has a national debt of 225%, Italy is over 120%. The US national debt is close to 80% of GDP. Also, the UK has had much higher national debt in the past, e.g. in the late 1940s, UK debt was over 200% of GDP.

UK personal debt statistics

People in the UK owed £1.5987 trillion at the end of august 2018

This is up from £1.5544 trillion at the end of august 2017, an extra £849.91 per UK adult and £66.96 higher than the previous month

  • The average total debt per household, including mortgages, was £58,776 in august.
  • Per adult in the UK that's an average debt of £30,698 in august, around 113.2% of average earnings
  • Based on august 2018 trends, the UK's total interest payments on personal debt over a 12-month period would have been £50,099 million. That's an average of £137 million per day
  • This means that households in the UK would have paid an average of £1,842 in annual interest payments. Per person that's £962, 3.55% of average earnings.
  • According to the Office for Budget Responsibility's march 2018 forecast, household debt is forecast to reach £2.296 trillion in q1 2022
  • This would make the average household debt £84,412 (assuming that the number of households in the UK remained the same between now and then.)
  • Outstanding consumer credit lending was £214.2 billion at the end of august 2018, increasing by £687 million on last month.
  • This is also up from £202.8 billion at the end of august 2017, and is an increase of £219.32 for every adult in the UK
  • Per household, that's an average consumer credit debt of £7,874 in august, up slightly from a revised £7,849 in July, and £419.93 extra per household over the year
  • The average consumer credit borrowing stood at £4,113 per adult
  • Total credit card debt in august 2018 was £72.2 billion. Per household this is £2,656
  • For a credit card bearing the average interest, it would take 26 years and 5 months to repay if making only the minimum repayment each month - Frightening!
  • The minimum repayment in the first month would be £64 but reduces each month. If £64 were paid every month, the debt would be cleared in around 5 years and 4 months.
  • Total net lending to individuals by UK banks and building societies rose by £3.49 billion in august 2018 or £112 million a day.
  • Net mortgage lending rose by £2.8 billion in the month; net consumer credit lending rose by £0.69 billion as well.


It is always better not to borrow money. Calculating your household budget before contemplating any additional expenditure, wherever possible. Try saving, rather than spending on your card or taking a credit agreement.

If you are already in significant debt and struggling to make ends meet, there are many charities that can assist with practical advice.

Effective debt management may ease the stress and anxiety that comes with constant financial worries. It may be a simple solution, like extending your loan to make lower payments, taking a 'mortgage break', consolidating loans or requesting a company to freeze interest.

Whatever solution suits you; always seek advice from professionals, registered charities or government bodies. You do not need to pay for debt management advice there are many companies that offer this for free.