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Debt Problems in the U.K.: Facts and Figures

Filed under: People Infographics | 2 Comments »

ukdebtproblems

This infographic, supplied by MoneyDebtandCredit.com examines the debt problems plaguing the United Kingdom in lurid detail.  According the graphic, the total personal debt in the U.K. amounts to a monstrous 1.454 billion, which, sadly, is more than the country’s annual output. Now, I’m no economics expert, but there’s something very, very wrong with that picture.

The future impact of the fact that the U.K. owes more in personal debt that the country’s total GDP is not yet known. Obviously, if the country was a business, it would have to close its doors if this continued for a long enough time. But countries are not businesses, and these days, an economic collapse of any first world country would send ripples through the global economy. So, it seems unlikely that Britain will have to deal with the consequences of its debt problem for a very long time.

The graphic notes that interest rates are expected to rise this year, which will cause many consumers to face higher monthly payments at a time when they already struggling to meet their existing outgoings. Even more disturbing is that the average person already on a debt management system plan has unsecured debts to the tune of $28,578 (converted to U.S. dollars), with 19 percent owning more than 48,004.29 on credit cards, overdrafts, personal loans, store cards and credit cards. This amounts to 126 percent of average earnings.

46 percent of personal debt is on credit cards. The graphic asks: “What is the makeup of the type of personal debt for the average British, upstanding citizen-and I use the word “upstanding” loosely, as I don’t really consider someone in gratuitous debt to be upstanding :). Let’s break it down.

Credit Cards: 52 percent

Personal loans: 36 percent

Overdraft: 3 percent

Catalogue, store loans, HP Secured loans: 2 percent

Other: 6 percent (Don’t ask what’s in this other category. Believe you me; you don’t want to know.

I think the true nature of this crises can be characterized by this mind-blowing stat: a whopping 372 people a day will be declared bankrupt or insolvent.

Design: B

This design is better than average, but it’s not superlative. Overall, it’s very strong with appealing colors, charts and graphics.

Content: A-

The content makes your brain and your heart race. The mind boggling stats found in this graphic are enough to make anyone go into spasms. The debt problems of the human race are in fact so horrific that a horror movie about them could be made.


2 Comments on “Debt Problems in the U.K.: Facts and Figures”

  1. 1 Richard said at 4:37 pm on February 14th, 2011:

    This is because the financial system is actually mathematically unsustainable. If I understand it correctly, it’s because the fractional reserve banking system means that banks can lend more than they have (not too different to printing your own money and then lending it) which feeds back on itself so that there actually isn’t enough money in the economy at any one time to pay the interest due in the future. Currently the economy relies on constant growth so that by the time the interest is due the economy has grown to cover it, but obviously growth can’t go on forever in a finite world (especially when it’s compound growth), so at some point the whole thing will fall apart. Apparently something like 95% of the money in circulation is debt, so there’s more of the ‘counterfeit’ debt money – which was supposed to be paid back – than actual ‘real’ money and so the debts can’t actually ever be paid back.
    It looks like this is showing that point – that there isn’t enough money in the UK economy to pay even its interest. That can’t go on for too long before something explodes.
    Search for the video “Money as Debt” for more info about it. It would actually be a good case for some effective information design to make clear to people what’s actually happening. The video is already a good example, but a bit long for most to sit through.

  2. 2 Adam said at 12:14 pm on February 15th, 2011:

    How do you know that these figures are correct?

    The source is MoneyDebitCredit who offer a paid service to sort out your debts.

    So how do you know that those ‘horrific’ figures aren’t just made up so that you feel compelled/scared enough that you pick up the phone and give them a call?