Precious Plastic: Five years of paying off debt comes to an end - or does it?
Our latest Precious Plastic report reveals that UK households are still wary of taking on more debt despite low base rates and improvements in the economy. How are customer expectations changing? How can businesses sustain growth?
- UK households have paid off a quarter of their unsecured debt since 2008 (excluding student borrowing)
- UK households remain vulnerable to interest rate rises – 1% increase in borrowing costs could result in an extra £550 a year in repayments
- Increasing levels of student debt mean that many graduates may delay taking out a mortgage
- Cutting across these developments is the impact of digitisation, more probing regulation and new ways of accessing credit
Lenders will be forced to compete more vigorously for a limited pool of business rather than relying on top line expansion. As we explore in the report, the businesses that come out in front will have the sharp customer understanding needed to deliver good customer outcomes.