UK Credit Growth: Four Times Greater then Wage Increases

by Brian Riley 0

Here’s an indicator worth considering.  Personal lending growth outpaced wage consumer earnings growth by 400%.  The metric will not replace the standard Return on Assets(ROA), or Net Credit Losses (NCL), but it is an interesting thought.

  • The value of outstanding personal loans in Britain is rising four times faster than wages, new analysis reveals.

  • This figure has risen by £7bn, or 25 per cent, from 2013-14, according to UK Finance.

  • In comparison, the typical full-time worker has seen their pay increase by 6.5 per cent over the same period.

The metric is anecdotal  at best, but imagine 6.5% in wage growth since 2013, while personal loans volumes grew by a whopping 25%

  • More than half of postcode areas in Britain have seen unsecured lending amounts increase by more than 25 per cent.

  • The biggest rise occurred in the St Albans postcode area (AL), where unsecured lending rose by an average of 43 per cent.

I won’t be doing the same calculation for the US market, but it makes you think.  It is probably one of the reasons UK regulators have been talking about growing debt in the market.

Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group

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