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Snapshot of Household Finance – December 2018

Friday, 25th January 2019

Key data highlights for December 2018:

Credit card debt

  • Credit card spending for December 2018 was £11.0BN, this is up 8.8% compared to the same month on the previous year
  • Credit card borrowing increased by 4.7 per cent in the twelve months to December
  • Personal borrowing with loans and overdrafts grew by 3.4 per cent in the year to December.

Residential mortgage lending

  • Gross mortgage lending across the residential market in December 2018 was £21.1bn, 4.7 per cent higher than the same month the previous year
  • Gross mortgage lending across the residential market during 2018 was £267.5bn, some 3.8 per cent higher than in 2017
  • The number of mortgages approved by the main high street banks in December 2018 was 2.4 per cent lower than the same month the previous year; approvals for home purchase were 5.3 per cent higher, remortgage approvals were 5.8 per cent lower and approvals for other secured borrowing were 18.9 per cent lower.

Personal deposits

  • Deposits held in instant access accounts were 2.4 per cent higher than last December
  • Personal deposits increased by 0.6 per cent in the year to December 2018.

Eric Leenders, Managing Director, Personal Finance at UK Finance said:

“Growth in credit card spending continues to be largely offset by increased cardholder repayments, with almost half of cards not bearing any interest at all. This reflects the growing trend of consumers using credit cards as a preferred payment method rather than as a means of borrowing, in order to take advantage of additional protections and value-added benefits.”

Mike Thomas, Founder of DebtWizard, said:

“It's an interesting notion made by Eric Leenders but I'm still not entirely convinced that consumers are racking up debt on credit cards as a preferred way of borrowing merely to receive the protection under S75 Consumer Credit Act on any purchase in excess of £100. In my many years of experience covering consumer debt issues I've seen the misuse of credit cards as key to putting the consumer into unmanageable debt.

It is not unusual for people to use the credit card to pay essential bills such as the mortgage or rent, energy along with other day to living costs such as vehicle fuel and food. Too many consumers live above their means, others with no savings and unfortunately succumb to either a relationship separation, redundancy, maternity or illness. Anyone suffering one of those key debt triggers will understandably turn to credit cards if they have not already exceeded their limits."

About UK Finance

UK Finance is the collective voice for the banking and finance industry. They represent more than 250 firms across the industry to help drive forward positive change to enhance standards, support customers and promote innovation

For more information including historic monthly stats visit www.ukfinance.org.uk.




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