Britons’ debts are creeping up again as the nation are “falling back in love with borrowing,” said accountancy giant PricewaterhouseCoopers (PwC).
According to the firm’s latest report “Precious Plastic 2015,” the average UK household will rack up £10,000 ($US14,924) in unsecured debt by the end of 2016 as Britons try to take advantage of record low interest rates that have stayed at 0.5% since 2009.
The data showed that borrowing on credit cards was responsible for 22% of the rise in the unsecured debt while loans, overdrafts and student loans accounted for the rest.
Last year, unsecured debt returned to an all-time high, in cash terms, of nearly £9,000 per household.
But PwC warned that “consumers could begin to feel squeezed once again” if interest rates were to rise. It also warned that “there is a danger of complacency” despite
most Britons being currently “in control” of their borrowing.
It said if interest rates were to rise by 2%, Britons would have to find an extra £1,000 to pay just the interest costs alone.
The total household debt to income ratio is projected to reach around 172% by 2020.