A recent report has revealed that many households across the UK are still in debt for thousands of pounds, despite the fact that they have spent the past year or two trying desperately to pay down their unsecured debts. Many have stopped putting their money into savings due to the low returns and have started using them towards clearing debts. Others have taken advantage of the record low base rate, which has been at a record low of 0.5 percent for nearly three years, and have used the money saved on mortgage repayments to try and clear some of their unsecured debt.

Officials have said that although people have been trying to pay down their debt, many are still thousands of pounds in debt, with the average household unsecured debt standing at £7900, made up of debts such as credit cards, overdrafts and unsecured loans. This comes from the recently released the Precious Plastic report from PricewaterhouseCoopers (PwC).

Around £355 of personal debt per household was paid off in 2011 according to the figures, but even so households in the UK have been described as “among the most indebted in the world”. It is thought that over the coming year households will continue to pay down debt, bringing the average debt per household down to £7500 in 2013.

One industry expert stated: “UK consumers are among the most indebted in the world, with the average UK household still saddled with nearly £8,000 of unsecured debt. Although the UK Government’s austerity drive appears to be hitting home, with households paying off an average of £355 worth of their debt in 2011, three years of austerity by UK consumers has only made a small dent in the total levels of borrowing. In addition to this, our credit confidence survey has shown that there is a growing reluctance to borrow in the future and a marked deterioration in confidence about meeting repayments, particularly among 18 to 24-year-olds.”