Average debt hits £5,000

Average personal debt has soared by 50% since 1997 to more than £5,000.

The Liberal Democrats said figures from the Office of National Statistics showed people now owed an average of £5,330 in unsecured debt, which excludes mortgages.

The figures come as the Bank of England's Monetary Policy Committee is widely expected to raise interest rates for the first time in nearly four years.

It is tipped to raise rates by 0.25% to 3.75% following evidence that the economy is beginning to recover, while the housing market and consumer borrowing are not slowing.

Vince Cable, Liberal Democrat Shadow Chancellor, said: "With interest rates set to start rising immediately, the ticking debt time bomb is now set to explode.

"Many people who have borrowed to the limit are going to regret pushing their debts up so high."

The figures came as research for CPP Group, which offers protection products, found that one in four people are now worried they will not be able to keep up with their debt repayments in the next three months.

  • About 29% of people say they are in danger of falling behind with their mortgage;

  • 22% are worried they won't be able to pay their council tax;

  • 12% think they won't be able to keep up with credit card repayments.

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