Average Brit owes £300K in lifetime
BRITS will owe an average of £309,000 during their lives – and be most under the financial cosh at 35. Researchers say the figure applies to anyone who buys an average-priced house, gets a student loan, has a credit card for a decade and borrows to pay for a car and a holiday abroad.
More than a third of the sum – £111,000 – is made up of interest.
Website moneysupermarket.com broke down the nation’s borrowing by analysing 2.7million credit card and loan enquires on its Smart Search eligibility tool.
And it used the data to create a unique picture of how much people can expect to owe at different ages.
According to the website, borrowing begins at 23 – the average age for students to enquire about a credit card.
Although university tuition fees are now a massive £9,000 annually, it will usually be some years before student loans have to be repaid.
At age 28 there is a major borrowing peak as financial responsibilities start to kick in. As people are two years away from hitting the national salary average of £28,200, this age sees the highest rate of enquiries for credit cards and loans.
The peak age for having a baby is now 32 and this has been steadily increasing over the past 50 years.
But the delay may also mean prospective parents feel better prepared financially to cope with the £230,000 cost of raising a child to 21. However, by the time people get to 35 many are starting to feel the financial strain.
With a mortgage, children and previous outstanding borrowing, this age is when the number of applications for ‘debt loans’ – taken out specifically to pay off other money owed – begin to soar.
Age 39 is the home improvement loan milestone as families, put off by rocketing house prices and the introduction of new stamp duty tariffs, decide to stay put and extend rather than trade-up.
There can also be big bills for 44-year-olds. This is the most common divorce age, costing the average person £70,000 – nine times more than the usual wedding loan.
People aged 65 have the lowest rate of enquiries for loans and credit cards but the amounts they request are at their highest, revealing that borrowing continues well into retirement age.