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Adverse borrowers are spending less and saving more as the UK debt pile is reduced – but more still has to be done before many people are in the black.

According to Credit Action, the total UK personal debt pile at the end of June 2009 stood at £1,458bn, or £1.458 trillion. That's a big pile, but thankfully it is being reduced, slowly. The debt charity found that debt growth has slowed by 1.2% in the last 12 months which equates to an increase of around £14.35bn. That might sound like a lot, but the increase was around £116bn in January 2008.

So people are really working at spending less and saving more and paying off more debt – Britain has woken up to the fact that the only way bad debt can be solved is through hard work, hard saving and sensible, long-term financial decisions.

But there is still much to do – Credit Action says the average household debt in the UK is around £58,320, including mortgages. If you add to this the 2009 Budget figure for public sector net debt expected in 2014 then this figure rises to £116,160 per household – so the future still seems full of debt.

And it will only keep increasing until people really begin to work on their problems – Britain's interest repayments on personal debt were £66.3bn in the last 12 months, with the average interest paid by each household on their total debt being approximately £2,650 each year.

So things are improving, but there is still a lot to do. During June 2009 Britain's personal debt increased by around £1 million every hour and a half. The time is now to really begin turning debt round – if you want to turn the tide on your debt problems talk to a financial professional who can point you towards a future without debt.

SOURCE: Credit Action, 31/07/09

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