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Are you spending your way into debt?
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| (C) Rex Pictures |
We’re splashing out more cash than ever on luxury purchases – UK consumer spending topped one trillion pounds over the last year, according to new research. If your spending is spiralling out of control, it’s time to take action. Get back in the black with our money makeover
UK consumers spent a frightening £1.09 trillion on consumer goods last year - that’s a 9% increase on 2005’s total consumer spend.
While a significant chunk of that money was spent on the soaring cost of housing – about £400bn, or £4 in every £10 spent, was swallowed by housing costs last year – we weren’t holding back on spending in other, less essential areas.
Around £9.8bn went on domestic holidays and £23.8bn on holidays overseas. Meanwhile we splashed another £17.7bn on eating out – and even when we ate at home we didn’t hold back either, buying better quality food. Spending in this area hit £58.3bn. Even the consumer magazine market hit £1bn for the first time ever.
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The good life
Things like paying off credit card debts and mortgages appear to be well down people’s priority lists, according to the research by consumer intelligence company Mintel. While nearly a quarter of us plan to splash out on a foreign holiday in the next 12 months, only 10% of us plan to make paying off the mortgage a priority.
We’re still comfortable with our debt levels, even though the average UK household debt on cards and loans is £8,833. Add the mortgage into the mix and that figure rises to £54,452. And with interest rates at a six-year high, that figure is only set to get higher.
But even a pay rise is unlikely to help many of us. According to the insurer Prudential, Britons say a pay rise or bonus only lasts them two months on average before the extra cash starts getting eaten up by ever-growing spending.
Furthermore, spending can be addictive. The Daily Express reported this week that one compulsive shopper, addicted to the buying “buzz”, managed to rack up debts of £250,000 before going bankrupt. But there are ways to regain control of your life and cash without ending up in insolvent. We show you how.
