Reality Check: Has personal debt been growing? - BBC News
The Bank of England's stability chief warns of the dangers of rising personal loans.
The Bank of England's financial stability director, Alex Brazier, has been warning about the dangers of rising personal loans.

He said that High Street banks were at risk of entering "a spiral of complacency" about mounting consumer debt levels.

"Household debt - like most things that are good in moderation - can be dangerous in excess," he said.

The Bank of England's own figures put total debt to individuals at about £1.5 trillion, which is an average of £28,000 for everyone over 16 in the UK.

Most of that - about £1.3tn - is made up of mortgages. The rest is for credit cards, overdrafts and loans to buy things like cars, bikes or kitchens.

If you look at what's been happening to lending to individuals, you can see from the chart above that it was rising sharply in the years leading up to the financial crisis, then it flattened out. But in the last couple of years it's started rising again.

Mr Brazier talked about the risk to banks from the £200bn of non-mortgage debt, which has been growing much faster than household incomes.

The credit-card element is £68bn, which is up 18% in the last three years.

Of the remaining £130bn, the big growth area has been car loans, with four-fifths of new cars last year bought using Personal Contract Purchase (PCP) deals, which tend to come from finance companies linked to car manufacturers. The Financial Conduct Authority is already concerned about the amount we're borrowing to buy cars.

Can we afford all this? Household debt including mortgages as a proportion of household income rose from 95% in 1997 to 160% before the financial crisis. It then fell back to about 140% but has now started ticking back up. The Office for Budget Responsibility predicts that it will reach 153% in 2022.

And all of these Bank of England statistics exclude student loans - currently about £89bn of outstanding student debt, which has more than doubled in the last five years.

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