Levels of debt continue to grow
Research from the Department for Work and Pensions examines characteristics of household debt.
11:40 14 June 2004
New research from the Department for Work and Pensions has examined the characteristics of household debt.
It has looked at families that are in debt and, in turn, the nature of their financial difficulties.
Over five years, the average amount owed in outstanding credit more than doubled from 890 in 1995 to 2,000 in 2000. Lone parents had a much higher risk of being in arrears than two-parent families.
Families in debt were more likely to have a head of household who was in their twenties and not in paid work. Tenants were also more likely to be in debt than homeowners.
The average owed by families in debt, excluding overdrafts was 300, although a quarter of families who owed the largest amounts had accumulated 740 in arrears.
Four in ten households blame their debt on loss of income, most commonly due to redundancy.
The analysis was carried out by the Personal Finance Research Centre, University of Bristol, and was based on a number of national surveys including the Families and Children Study, British Household Panel Study and the DTI Over-indebtedness survey.
Between 1999 and 2002, the proportion of lone parents who were in arrears fell from almost a half (48 per cent) to just over a third (35 per cent). In the same period, arrears amongst families on Income Support fell from 55 to 48 per cent, and amongst workless couples it fell from 48 to 39 per cent.
The research was conducted by Elaine Kempson and Steve McKay of the Personal Finance Research Centre, University of Bristol and Maxine Willitts of the Social Research Division at the Department for Work and Pensions.