Are we borrowing too much?

The Bank of England has revealed that UK consumers now owe more than £1,000 billion pounds.

This comes as the bank's rate-setting body is due to meet next week to set interest rates for August amid concern that the rate could be increased again.

About 80% of personal debt is said to be in the form of loans secured against dwellings, such as mortgages and re-mortgages.

Debt charities are warning consumers to think hard about whether they can manage their debt burden if interest rates go up over the next few months.

Is the country too heavily in debt?

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This debate is now closed. Thank you for your e-mails. The following comments reflect the balance of views we have received:

Sadly, though I agree with many comments here, no one puts a gun to anyone's head and tells them to borrow money. Yes, we are bombarded by advertisements to buy stuff and spend money, but ultimately the decision is made by the individual to either become more indebted, or to spend now and worry about it later. No one else makes this decision for them.
Mark White, Nottingham, UK

I object to all the smug people on here who have no debts and are touting only buying what you can afford James, Rochester

I object to all the smug people on here who have no debts and are touting only buying what you can afford. Well I am in my mid-twenties and most of my wages go in servicing my student debts. If I had to go without what I can't afford, I would have to drive without car insurance/tax, stop paying rent and squat. I have to live on credit to keep my head above water, until I earn enough to start paying off these debts.
James, Rochester

"Are we borrowing too much?" I the question not in fact "Are we being allowed to borrow too much?" With the world being full of analysts why is it not clear to the lenders that people are going to get into bother? Is it not a worrying time for the lenders when personal bankruptcy and insolvency is increasing at an alarming rate? As per the answer of almost all these issues the greedy culture within Britain will have to change.
Steven Rankine, Glasgow, Scotland

In my experience, the banks don't listen when you write to all creditors with a list of debts asking for interest rates to be lowered so that pro-rata monthly amounts can be paid off. I went through the process that the National Debtline advise, and HSBC, MBNA and student loans declined the offer, whilst First direct was the only one to accept my repayment plan (the smallest debt). I have now had to make myself unfindable. They write to me at addresses I gave as much as four years ago (my fathers) and I have to ask him to return them not known at this address. This advice is fine if you have the means to eventually get out of debt, but when you're still earning below the student loans repayment threshold, it's not possible. (NB student loans were chasing m because they claimed not to have received my deferment form and charged me 12 pounds several times for each letter to tell me so.)
Rachael, London, UK

We live in a greedy, materialistic world where possessions are prized above spirituality and children are bombarded with persuasive advertising from the moment they're old enough to stare at the TV. Instant gratification is regarded as a right: whether it is for sex, food, material goods, beating your kids or swearing at someone who annoys you. It's all down to poor impulse control and reduces us to the level of animals or 2-year-olds. Change your outlook! There's more to life than shopping! Enjoy a picnic in the country, cooking, reading, shopping in car-boot sales. You've nothing to lose but your debts!
Juliet Dagnall, Birmingham, UK

Both me and my fiancé are in a fair amount of debt (I think around £30,000 between us) and we have everything we want - very much a buy now worry about it later. But we know that by the time we're 30 (26 now) we will only have our mortgage to worry about and will have our cars and motorbike fully paid off. We're happy doing it this way - debt when we're young and then being sensible when we need to be. Debt is fine as long as you keep in control of it and only borrow what you know you can pay back.
Cherry W, Northants

Smart people are saving their hard-earned cash Colin, Stirling, Scotland

This country is headed for financial meltdown for sure. I know someone whose £5.50 an hour wage is boosted by tax credits to a level where she was offered a mortgage of £85,000. This is totally irresponsible lending practice. Smart people are saving their hard-earned cash waiting for all the lovely bargains on the horizon.
Colin, Stirling, Scotland

I am 26, £50k in debt, lost my car and house and thinking of bankruptcy to clear my debts. I think we are all borrowing more than we can afford!!
Kirt, Swindon, UK

I think there's too big an emphasis on owning a home here. You're considered 'poor' if you don't. What people forget is that they don't own anything until they've paid for it outright! Having a big mortgage just means you're a debtor, not a homeowner. I'd rather rent and live within our limited means than risk ruining what credit I have buying a roof I can't afford.
Leigh, Edinburgh

Maybe the people who are getting into so much debt are really the smart ones. Live it up today with someone else's money, then when the crash comes and it ends in tears just blame the government, the economy and the banks!
Brad, UK

I was offered a gold credit card with a ridiculously high limit Abbie, Leamington Spa

I have put myself through university at a cost of £14,000 and have horrible memories of crying at night because I didn't have the money for a train ticket to visit my mother. My overdraft is £1,500 and I have just taken out a £7000 loan to cover the next stage of my education. I hardly have money to pay the rent. However on phoning my bank to check my balance I was re-directed to a call centre where I was offered a gold credit card with a ridiculously high limit. Why should I say no? Money and credit has controlled my life since I was 18 years old and borrowing has become second nature.
Abbie, Leamington Spa

If you do some basic calculations on these figures then this works out at about £32,000 per household of secured loans (mortgages), and £4,000 of unsecured loans per head in the UK. I would therefore say that things are not as bad as some people are claiming. Debt will inevitably rise with the cost of living. However the financial services industry needs tighter regulations regarding personal lending.
Chris, Hampshire

This is a time bomb and it's being loaded with more TNT every month.
Dan, UK

I believe that as long as house prices are so ridiculously high in proportion to earnings, large mortgages will rise. Both my wife and I have good professional jobs with good incomes, yet we will need to borrow over £200K to buy a small semi-detached 3 bedroom house, and the repayments will be tight. This also takes into account that we have circa. £60K equity in our current property.
Stuart Warren, Chertsey, UK

If you can't afford to pay up front, then you should go without Julia, Bristol

There is little incentive to "save." When you borrow money, the interest rate is sky high. But if you have any savings and are in credit, the interest rate is minuscule. People should learn to go without more! If you can't afford to pay up front, then you should go without. I would never get into debt, I simply go without.
Julia, Bristol

Last year my partner was changing jobs and needed a small extension of £100 on her overdraft to get her through the month. Although she had a good history with the bank they refused - and then offered her a pre-approved loan for several thousand pounds! She turned down the offer in disgust and when her financial circumstances improved changed banks. However is it little wonder that so many people in Britain get in trouble with their debts when greedy banks are pushing loans on people even when they haven't asked for them?
Nick, London

I'm 26 years old and earn about £25k a year. I have two credit cards (one I don't use), plus a mortgage. Between my bank offering me a low rate loan, my credit card limits going up and up, and my mortgage offering extra funds, I could currently borrow £30k pre-approved. And they wonder why people get into financial trouble.....
Anon, Brighton, UK

Isn't economic growth dependent on us consuming more products and services than we can actually afford?
Rick M, Bury, Greater Manchester

Unfortunately it's inevitable. Otherwise the next generation will be living at home with their parents... forever!
Sarah Miles, Worcs

I'm not surprised that borrowing has increased. Most people probably had a 3% pay rise this year; with council tax rising by up to 18% (e.g.: Shepway) people are looking to other ways to fund these bills. The other way of making money people have is their houses; by releasing that equity in the form of a loan then people can continue to pay their sky-rocketing bills. If the government wants to do something about borrowing then it really needs to cap tax rises to the same rate as people's ability to pay them as otherwise the less well off will be forced to borrow heavily simply to survive.
Sam, London

I cannot afford to buy anything out of a very strict budget Allison Fraser, Portsmouth, England

I am a graduate, 1 year out of university. I am 23 years old and I am £15,000 in debt. Someone please tell me how I am to ever buy a house? I cannot afford to buy anything out of a very strict budget, I haven't had any holiday in 6 years as I have worked every academic vacation to support myself through college and uni. I have not been out of work since I was 14 years old. And yet I am considered the lowest of the low by banks, and cannot get financial assistance from any source.
Allison Fraser, Portsmouth, England

People in this country for the most part lead dull working lives mostly stuck in tedious office jobs staring at computer screens all day with less and less human contact and little ability for self-determination. They also work longer hours than anywhere else in Europe. As a consequence they seek as much pleasure as possible outside the office: hence the huge increase in alcohol and drug use we are seeing and the splurging on treats, expensive holidays and consumer goods which lead to debt.
Peter Christie, London, UK

Something many people seem to miss when discussing this is that this massive ballooning of debt is not just happening in Britain - it's also occurring in the US, Australia, the Netherlands, etc - and when (not if) the bubble bursts, the effects will be felt across the world. No use just blaming this one on Gordon!
Saffron Davies, South Wales

This is a terrifying problem. The Japanese stock market has been stagnant for 15 years - against all previous predictions. The UK stock market has been similarly stagnant for five, and may well not show any significant gains for another ten (or even longer). If the property market adopts a similar profile, how are people going to pay their interest only mortgages off in twenty years? Endowments and ISAs won't have risen enough - and catastrophically, there will be insufficient equity in property to make re-mortgaging viable. We're going to see a lot of homeless pensioners in 2020.
Tod, Barnstaple

If Banks encourage people to borrow and Shops encourage people to spend, they will. That's capitalism in action. Business needs to balance financial gain with moral principles. Without legislation that will never happen, while responsibility to shareholders outweighs responsibility to customers.
David A. Ratcliffe, Gorton, Manchester

Only spend what you can afford. Obvious? Not for many Britons who seem to relish living beyond their means. I accept it will slow the growth of the economy if we all apply this principle to our spending, but isn't it much better that we are debt-free and owe nothing? Won't we feel more content and satisfied? Furthermore, a lot of what we buy is junk, hence, if we reduce spending by purchasing only what we need (as opposed to what we want), companies will start to manufacture only that which is necessary. A 'side-effect' will be an improved environment in the long-term.
Talha, Bolton, UK

I've now adopted a policy of asking myself if I really need something before buying it Chris, West Yorkshire

I got into a lot of debt when I was younger - credit cards should have an age limit of 25 in my opinion. I was only 18, wanting cars, wanting to go out every night etc. and there are banks throwing money at me. My spending is now back under control but I'm still paying off the mountain of debts. I don't pretend it's anyone's fault other than mine, but if the government wants to cut borrowing then they need to make it more difficult for young adults especially. I've now adopted a policy of asking myself if I really need something before buying it, rather than just wanting it. It works for me.
Chris, West Yorkshire

Yes, we probably are borrowing too much but why aren't the government asking why rather than tut-tutting about it. My council tax has doubled in the past couple of years - yet my salary hasn't. My train fare goes up each year and the cost of petrol has skyrocketed. Where are we supposed to find the extra cash to live comfortably?
Marie, London, UK

Apart from my mortgage I owe nothing. If you haven't got it you cannot spend it. People saying that they blame banks and the government for their debts should take a reality check.
Scott, Rochester, UK

It's time now we learned to be responsible again James, Swansea, Wales

Given the fact that the price of everyday items has consistently fallen over the last few decades, I find it incredible that people feel the need to borrow more and more. The present situation has arisen from the "I want it now" culture, no doubt fuelled by a plethora of TV ads and 0% finance deals which encourage people to spend money they don't have. It's promoting a society where immense debt is seen as acceptable and nothing to be ashamed of. Our lack of self control is evident. So perhaps a sensible move would be to ban all loan advertisements and 'buy now pay later' deals. It may be tough but really, it's time now we learned to be responsible again.
James, Swansea, Wales

I work for a credit card company and deal with people who are struggling with debts all day. I've noticed the way we have given credit cards to pretty much anyone regardless of their ability to pay such as those about to reach retirement and very often don't even have employment details. Of course it's up to people also to manage their finances and get out of the culture of buying what they cannot afford. There is help in the form of the CCCS and the only way to get out of the problems is to own up, be honest with your creditors and stop spending!
Anon, Manchester, UK

Soon the working population will not be able to support the old age population in this country. Debt and huge house prices are the government's way of keeping us all working well into our old age. There would be a revolt if the pension age was raised so they'll make us slaves to our debts instead.
Dawn, Kent, UK

It is too easy to borrow money and the aggressive marketing by the banks makes it worse Terry, Epsom, England

It is too easy to borrow money and the aggressive marketing by the banks makes it worse. We've lived in the same house for 15 years, it's now paid for, no mortgage. About 5 years ago we decided to cut our debts and have now reduced or credit cards to zero. All this means that our credit ratings are very good indeed. There is not a day goes by when there is not some offer put through the mail box offering me credit of some sort. Most give me a pre-approved level of around £10k and if I were to take them all up I would probably be able to raise the biggest part of £100k with no one asking me any questions. Crazy.
Terry, Epsom, England

House prices (and hence borrowing) are not high because of interest rates, but because of housing shortages. Usual Solution (which never fails to fail!) Jack up interest rates. Ruin a lot of people (make them homeless) free up homes for sale cheaply (of people who have lost their homes) temporarily glut the market) Many of these homes bought up by speculators who wait 6 months, when interest rates drop, then they make huge profits when market forces come into play again as house prices surge - result: rich builders and speculators... a lot of ruined lives.. and house prices surging again. All because the root of the problem not resolved... not enough houses to fill demand.
Tim Nast, Southampton, Hants

Banks literally throw money at us all the time Anthony Collins, Basingstoke, England

Of course we borrow too much, but this should not necessarily be blamed on us. Banks literally throw money at us all the time, with mail shots, and adverts etc. It is simply too easy to get credit, and too many people take it lightly. Of course the more we spend, the higher prices get, look at the housing market for a clear sign. Clamp down on the banks, and make people save a little more, instead of borrowing for things like holidays.
Anthony Collins, Basingstoke, England

The Bank of England is making a mountain out of a mole hill. There are approx. 50 million of us in the UK. That means we have about £20,000 each. But a lot of the 50 million have assets totalling more than £20,000 such as houses, cars and savings. Using this as an excuse to raise the base rate will cost us all dearly. It is almost another form of tax.
Stu, Kent

I was unemployed for 18 months in 2001/2002. I was not eligible to receive any benefits because I am South African, so we were a one-income family. Instead of putting hugely expensive junk on my wife's credit card, we spent frugally, bought mostly cheap but healthy vegetables and grains, and survived it. I managed to find work through perseverance (and working in menial jobs) and we now owe nothing. Common sense (as with everything in life) should tell people that spending a fortune on rubbish is plain stupid.
Martin, Reading, UK

Is there an economist in the house? During the European elections, much was made of how the UK's economy is currently stronger than those on the continent. I would genuinely like to know how far our economic 'strength' is driven by debt. As I understand it, the consumer and housing markets are helping prop up the rest of the economy, so do those on the continent put as much on credit cards or take out such hefty mortgages?
Michael S, Manchester, UK

Is it too simple to just make credit cards illegal? If you haven't got the cash - you can't spend it.
Paul, Cheshire

We wandered into the trap of consumerism and now there is no way out Matt, Chelmsford, UK

Yes, we most certainly are - and are encouraged to do so by industry and government, to line their pockets and keep the economy afloat. We wandered into the trap of consumerism and now there is no way out. Of course people will say 'it's OK so long as I keep on top of my payments' - but to apply that attitude to everything thing you buy - and extend it to all the things you WANT to buy, then it's a very dangerous liberty indeed.
Matt, Chelmsford, UK

What happens if house prices stop rising? I know people who are spending projected capital gains that haven't even happened yet, securing everything against their houses. We have to hope that the end of the 'boom and bust' economy is not all hype because another recession could really hurt.
Paul B, UK

My husband and I financed our wedding and furnished our new home on two credit cards and an overdraft. Needless to say we couldn't keep it up and we ended up going to see the bank manager, something we needn't have dreaded. In fact coming clean was the best thing we could have done and I recommend it to anyone in the same kind of trouble. They gave us a loan for the amount we owed which meant one way or another we would clear the debt within the 5 years given. Now we only have one credit card which has the balance deducted from our bank account each month whether we like it or not. Life is so much brighter now we're not living under the shadow of a seemingly uncontrollable debt and I'd tell anyone in similar circumstances to do the same as we did.
Jennifer, Netherlands, ex UK

It is now far too easy for people to borrow money. I find the numerous TV adverts for 'credit peddlers' offensive as they encourage people with bad credit history to borrow more to merely spoil themselves! However, those sucked in by these adverts only have themselves to blame. If you can't afford something you shouldn't borrow to pay for it.
GC, London

Britain has become a 'buy now, pay it sometime in the future' society. It is too easy to get into debt when you receive x number of pre-approved credit cards and y number of pre-approved loan apps through the post every week. Every time you look on the TV, it's an advert for finance, debt problems, loans etc. The problem lies in two areas. The companies should stop their aggressive marketing campaigns and should loan money more responsibly and the individuals have the responsibility of saying 'well, actually, I can't afford this'.
Emma, UK

Of course we are borrowing too much. When interest rates rise, and they will, people will be looking for a scapegoat. Someone or thing to blame as they have lost their home, car, family etc.
Paul, Wales

A couple of years ago a well known high street bank gave me a loan on condition that they cut up and cancelled my credit card with them. 2 months later I was pre-approved for a credit card from them with the same limit as I had before. I know it's my fault for getting into the mess I'm in, but banks do nothing to help the situation.
Anonymous, Warrington

Do we have any choice? My salary has not gone up, my council bill and every other bill has risen by large amounts. There comes a time when the money runs out.
David, Croydon