ARE BRITONS BORROWING BEYOND THEIR MEANS? - PRECIOUS PLASTIC 2017 - EXPLORING THE LATEST TRENDS IN UK CONSUMER CREDIT - PWC UK
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Are Britons
borrowing
beyond their
means?
Precious Plastic 2017
Exploring the latest trends
in UK consumer credit
www.pwc.co.uk/preciousplastic
Introduction
Welcome to Precious Plastic 2017, PwC’s tenth annual
survey of the UK’s unsecured lending landscape.
Our report highlights the continued rise of unsecured debt in the UK,
with the average household now owing a record £11,000. In the past year
alone, this has risen by 11% – a faster rate than any of the past 15 years.
The growth of consumer credit has attracted widespread media coverage,
as as well as, more recently, scrutiny from the Bank of England. Against
this backdrop of rapidly rising levels of borrowing, this year’s version
of Precious Plastic seeks to understand: are Britons borrowing beyond
their means?
Part One of our report examines how much people are borrowing and how,
while Part Two addresses the affordability of debt levels and includes the
results of our annual PwC Credit Confidence survey.
We hope that you find the report interesting and useful. If you would like
to discuss any of the issues raised, please feel free to contact one of the
authors listed on page 14.
Contents
Executive summary 1
Part One – How much are we borrowing and how? 4
1. Overall size and growth of the market 4
2. Credit supply and how it is spent 6
Part Two – Are we borrowing beyond our means? 8
3. The macro-economic backdrop 8
4. PwC Credit Confidence Survey 2017 10
5. Affordability – at the aggregate level 11
6. Affordability – by consumer groups 12
7. Preparedness for a change in circumstances 14
8. Financial literacy 15
Conclusion 16
Overall size and growth of the UK unsecured credit market
Size
Total unsecured debt now exceeds the pre crisis peak in 2008 by 30%
Growth
£300bn £11,000 11%
average unsecured
household debt
£80m
Close to
£239bn a day
(the fastest rate of growth for 15 years)
Nearly
4x
faster than growth of
secured debt in 2017
Favourable macro-economic re it n ence r ey
backdrop... for now
Overall credit confidence remains high...
120 w ons mer redit onfidence nde
110 112 112
110
4.4%
Lowest 105
100 99
unemployment 100 98
rate since 1975
90
2009 2010 2011 2013 2015 2016 2017
ource w redit onfidence ur ey
Slight deterioration in confidence in some areas...
Bank of England 25%
0.25%
Worried about ability to make 18%
base rate at future debt repayments 15%
record lows
Expect pay to be frozen or
decline in next year
28% 24%
22%
Interest cost of a
£2700 £970 £10k loan over
vs 5 years today vs Worried about availability of
in 2010 credit for future purchases
25%
15%
13%
2017
2010 2009 2016 2017
(Peak of Financial Crisis)
Some headwinds emerging
Brexit fuelling some of this concern...
GDP growth
forecast to
42%
1.1%
I am worried about the impact of Brexit
slowing 2018 on my finances 36%
Brexit will make me more cautious about
borrowing in the future 34%
2.8% vs 2.2%
n ation higher than wage growth
26%
2016 2017
he indicator is ased on se en attri utes across three measures of consumer credit confidence i people s le el of a ility to ma e de t repayments today and their worry a out this in
the future ii their worry a out their future access to and use of credit and iii their worry a out o security and e pectations for wage growth
Are Britons borrowing beyond their means? – Precious Plastic 2017 1
r a ility at t e a re ate le el
Total household debt to disposable income ratio
158% 147% 153%
2007 2017 2022
Net household assets as a proportion of household debt
8.8x 100years
a stronger position than at any point in almost
r a ility yc n er r
e e cre it t ay Average individual
for essential items in the unsecured debt to
past six months income ratio
By Age By Age
20% vs 6% 52% vs 10%
55+
25-34
55+
25-34
By Income By Income
16% 38% vs
vs
8% 9%
£10-20k £50k £10-20k £50k
By Home Ownership By Home Ownership
19% vs 11% 46% vs 17%
Renters Home owners
(with a mortgage) Renters Home owners
(with a mortgage)
2 PwCPreparedness for a change in circumstances
British household savings ratio at a record low
Headline savings ratio has declined significantly from
4.7% 1.5%
the post-financial crisis peak of 4.7% in 2010, and is
forecast to fall to -0.4% in 2017 and -1.3% by 2020
2010 2016
- 0.4%
Impact of Base Rate rises - 1.3%
2017
2020
67%
vs
Percentage of people
who think they
understand how an
increase in the base rate 12% 0.25% 1.25% £1,000
will impact their loan
repayments
vs percentage who correctly Approximate increase in annual interest payments
answered a basic question on a 25-year tracker mortgage if the interest rate
requiring them to estimate the impact increases from 0.25% to 1.25%
Financial literacy
Credit cards
72%
32%
Personal loans
58%
33%
Mortgages
57%
21%
Payday loans
35%
4%
% of people who feel they % of people who correctly
have a good understanding estimated the interest
6%
of the following financial costs and repayments of
products these products
Respondents that recall
receiving any formal
education at school about
how to manage
their personal finances
Are Britons borrowing beyond their means? – Precious Plastic 2017 3Part One –
How much are we
borrowing and how?
1. Unsecured debt has
reached an all-time high Figure 1: UK total unsecured lending and growth, 2002-2017
of £11,000 per household,
400 15
growing at a faster rate than +30% Projection
any of the past 15 years
10
Unsecured debt, £bn
300
The average level of unsecured
household debt now stands at a record
Growth, %
5
level of £11,000. At £300bn, total
200
unsecured debt is close to 30% higher
than the pre-crisis peak (see figure 1). 0
100
In the past year unsecured debt has -5
risen by 11%, or around £80m per
day, growing at the fastest rate since
0 -10
2002 and three times faster than
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
secured debt.
Growth rate Student debt Other unsecured debt
ource an of ngland w analysis
he inancial imes
4 PwCt dent debt, credit cards and car Consistent with our central macro-
finance represent over three- arters economic scenario, we project
of the total stock and recent growth in continued growth in unsecured
unsecured lending (see figure 2). Car borrowing over the next two years,
finance has grown by at least 15% for albeit at a slower rate of 7% in 201
each of the past five years, and 17% and 5% in 2019. However, risks to the
in 20172, which represents the largest downside have increased e.g. Brexit
increase among the main unsecured related uncertainty. Furthermore, rising
lending products. Newer forms of in ation is o t-pacing wage growth,
lending, such as Peer-to-Peer, are and this could stunt further growth in
also growing, but still only represent nsec red lending.
a relatively small proportion of total
borrowing. s of the first arter of
2017, the o tstanding loan book of eer-
to-Peer lending to individuals was only
£1.5bn3, representing around 0.5% of Figure 2: Value of unsecured lending, 2017 (£bn)
total unsecured borrowing.
300
73 7%
58 17%
Other
uto finance
67
9% redit cards
tudent loans
102 17%
Value (£bn) Growth Rate
ource an of ngland w nalysis
he inancial imes
eer to eer inance ssociation
Are Britons borrowing beyond their means? – Precious Plastic 2017 52. The supply of unsecured
Figure 3: Household unsecured credit availability
debt has decreased for two Net percentage balances
consecutive quarters for the
20
first time since the crisis
ollowing the financial crisis there was
a material reduction in the availability 0
of unsecured credit for households
(see figure 3), as financial instit tions
retrenched and tightened their -20
lending criteria.
The supply of unsecured credit began
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
to rebound from late 2010, with the
value of non-bank lending doubling by
2017 and f elling m ch of this growth ource an of ngland
(see figure 4). In contrast, it took banks et percentage alances are calculated y weighting together the responses of those lenders who
almost ten years to recover to the level answered the uestion a out e pected access to credit
of lending they provided to consumers
in 2006.
Figure 4: Bank vs. non-bank lending
Monthly non-bank lending
nde ed to an 2007 reached £7.7bn in March ‘17,
accounting for 33% of
unsecured lending
200
Non-bank lending
150 accounted for 23%
of unsecured lending
in 2008
100
50
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
MFI gross lending Other consumer credit lenders
ource an of ngland
200
150
100
6 PwC
50More recently, there are signs supply
may have begun to tighten, with the Figure 5: Items purchased using credit, proportion of adults (%)
Bank of England also having concern
over rising levels of consumer debt. It Groceries 15
warned that banks could stand to lose Petrol 10
around £30bn in the event of a severe
Household bills 7
recession and ordered them to hold an
Public transport 6
additional £10bn4 in capital to cover
Rent/mortgage payments 4
potential losses. However, the Bank of
England did not specify that similar Holidays 12
re irements wo ld apply to non-bank Clothing 12
lenders. The proportion of the main Entertainment 11
high-street lenders expecting to restrict Unplanned maintenance 10
access to credit between April and June Electronic items 7
was the highest since the financial crisis White goods 5
in 2008 (see figure 3 .
Vehicle purchase 5
While the level of unsecured Essential Non-essential
ho sehold debt has risen sharply over ource w redit onfidence ur ey ou o
the last five years, o r w redit
onfidence s rvey res lts show that the
proportion of adults using it to spend on
essential items has held broadly at at
around 12%.
Where credit is spent on essential items,
groceries, petrol and household bills
comprise of the most common spend
items (see figure 5). For non-essential
items, holidays, clothing and evening
entertainment are the most fre ent
uses of credit.
he an of ngland
Are Britons borrowing beyond their means? – Precious Plastic 2017 7Part Two –
Should we be concerned?
How we examine
the affordability of
unsecured debt
In this section of the report, we seek
to understand whether we should
be concerned about current levels
of consumer debt. We do this by
examining affordability across a Figure 6: UK employment rates (1995-2017)
range of factors.
76 9
We begin by setting the size and
growth of lending in the context of the 8
Unemployment rate, %
74
Employment rate, %
wider economy. We then draw upon
the results of our PwC Consumer
7
redit onfidence survey, assessing
72
consumers’ attitude and concerns
their current and future borrowing. 6
70
We then examine levels of bad debt 5
and other affordability measures
at the aggregate level, before 68 4
assessing how this varies by certain
1995
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2017
consumer groups.
Unemployment rate Employment rate
We conclude by assessing how ource ffice of ational tatistics
prepared consumers are for a change
in circumstances, such as a rise in
interest rates, and how financial Figure 7: Monthly Bank of England base rate vs. average £10k personal loan
literacy varies among the population. rate and credit card rate
20
3. Macro-economic
conditions have been 15
relatively benign, but £2,680 in total interest paid* £966 in total interest paid*
with increasing risks to 10
the downside
The record levels of unsecured debt 5
have been amassed against a relatively
benign macroeconomic backdrop.
*assuming 5 year loan term
However, more recently we have seen 0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
slowing growth, rising in ation and
increasing risks to the downside. Up to
BoE base rate Avg 10k personal loan rate Average credit card lending interest rate
now, low unemployment, low interest
rates, economic growth and real wage ource an of ngland w analysis
growth have underpinned consumer
confidence and growth in borrowing,
but the outlook is now less strong:
8 PwCi. Low unemployment Figure 8: UK GDP growth and alternative future scenarios
Unemployment has fallen to its
lowest level in the since 1 75 4 Scenarios
(see figure 6), which has helped
support rising spending and 2
borrowing levels.
0
% change p.a.
ii. Low interest rates
Interest rates remain at record -2
lows, with households continuing
-4
to benefit from low debt servicing
costs. The headline rates for
-6
many unsecured lending products
have fallen over the past decade
-8
(see figure 7), increasing their
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
attractiveness to consumers and
the ease of repayment. Over half Strong growth Main scenario Mild recession
of consumers we surveyed5 in
ource an of ngland w analysis
eptember 2017 e pect the ank
of England to raise interest rates
within the year, with around a
third saying they were worried Figure 9: ro th in in ation ad usted average annual earnings
about the impact. (excl bonus)
4 Forecast
iii. Economic growth
Our central scenario for the UK 3
economy is for relatively slower 2
growth over the next two years. (see
% change p.a.
figure 8). We expect GDP growth of 1
1.4% in 2018, followed by 1.8% in
2019, as the UK faces the impact of 0
uncertainty surrounding Brexit. -1
iv. Negative real wage growth -2
Real wage growth is falling into
-3
negative territory, meaning that
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
consumers’ disposable income will
begin to fall in real terms (see figure 9). Note: 2008 real prices
For example, average annual earnings
of £25,2006 in 2008 would have in ource an of ngland w analysis
fact fallen in real terms to £24,600
by 2017. his has been driven partly
due to a weakening of the Pound
post Brexit, leading to imported
in ation. ons mer appetite and
ability to borrow may be impacted if
this continues.
w redit onfidence ur ey
Are Britons borrowing beyond their means? – Precious Plastic 2017 9The PwC Consumer Credit
Figure 10: onsumer redit onfidence ndex
onfidence Surve
115
In conjunction with YouGov, we polled 112 112
110
over 2,000 British consumers about 110
their attitudes towards debt, their ability
to repay and their future borrowing 105
intentions. First run in 2008, the PwC 105
ons mer redit onfidence s rvey 100
provides one of the longest running 99
100 98
and most comprehensive pictures of
ritons finances. 95
4. Consumer Credit
90
2009 2010 2011 2013 2015 2016 2017
onfidence has remained
strong, despite the continued ource w redit onfidence ur ey
rise in unsecured debt
r ons mer redit onfidence
Figure 11: Percentage of adults that agree with the following statements
Index2, which brings together all the
key aspects of the survey into a single 30
consolidated measure, (figure 10) shows 28
overall confidence as being level with 25 25
24
25
last year. Although this year’s result 22
brings to end four years of consecutive 20
increases, overall confidence remains 18
higher than at anytime since the 15 15 15
financial crisis, despite overall 13
unsecured debt levels being 30% higher. 10
hile the overall level of confidence 5
among consumers is stable on last
year, and relatively high in the context 0
of the past decade, there has been Worried about ability to make Expect pay to be frozen Worried about availability
future debt repayments or decline in next year of credit for future purchases
a slight increase in concern across
2009 2016 2017
some measures. For example, the
proportion of consumers who are ource w redit onfidence ur ey
worried about their ability to make
future debt repayments has risen from
15% to 18%, while those worried about
Figure 12: Percentage of adults that agree with the following statements
the availability of credit for future
purchases has risen from 13% to 15%
(see figure 11). 50
45 42
Consumers are also more concerned 40
36
about Brexit than they were a year ago. 35 34
They are more worried about the impact 30
of re it on their finances and are more 26
25
cautious about borrowing in the future 20
as a result (see figure 12).
15
10
5
0
I am worried about the impact re it will ma e me more cautious
of re it on my finances about borrowing in the future
2016 2017
ource w redit onfidence ur ey
10 PwC5. Levels of bad debt remain Figure 13: Credit write-offs as a proportion of outstanding balances
low in historic terms, with
8
affordability measures still
well below pre-crisis peaks
6
Credit card write-offs as a proportion of
% of write-offs
outstanding balances have continued on
a downward trend and are at historically 4
low levels (see figure 13). This fall in
the proportion of bad debt has been
driven by a number of factors: high 2
growth in outstanding balances, (i.e. the
n merator a period of economic growth,
as well as lenders’ own efforts, such as 0
2006
2007
2009
2010
2011
2012
2014
2015
2016
2017
the tightening of underwriting criteria.
Individual insolvencies have also fallen,
from a peak of around 36,000 to 22,000 ource an of ngland
per arter, between 200 and 2017 (see
figure 14).
Figure 14: Total individual insolvencies per quarter by type
At the aggregate level, debt affordability 40,000
levels do not give rise to particular
concerns. UK household debt to
disposable income ratio has risen to 30,000
147% b t is still below its pre-crisis peak
of 160% (see figure 15). What’s more,
revised forecasts suggest that this level 20,000
will not be e ceeded within the ne t five
years, reaching an estimated 153%
by 2022. 10,000
Although unsecured debt has been
growing rapidly since 2012 (8% annual 0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
growth rate , sec red debt7 – which
makes up over 80% of total borrowing
Individual voluntary arrangements Bankruptcies Debt relief orders
– has grown only by around 2% per
year. This weighting has resulted in a ource nsol ency er ice
more gradual rise in the overall debt to
income ratio.
Looking at the household balance Figure 15: Total UK household debt to disposable income ratio
sheet also suggests a relatively healthy
Forecast
position. Net household assets (after 170
ded cting debt now stand at . times
ho sehold income in 20178 – a stronger 160
position than at any point in almost
100 years. 150
While affordability measures at the 140
aggregate level may not suggest
immediate risks, certain consumer 130
groups are already exhibiting concerns.
120
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
ource
an of ngland
arch
Are Britons borrowing beyond their means? – Precious Plastic 2017 116. Younger borrowers and An estimated 3.3m people are in Low earners are also more likely to be
renters are significantl more persistent debt, which costs them an concerned. Our survey indicates that
average of £2.50 in interest and charges lower earners typically hold a similar
concerned about their debt for every £1 borrowed.9 amount of unsecured debt to higher
earners and therefore have the burden
While overall affordability measures
Certain consumer groups are more of a debt to income ratio which is four
may not give rise to particular concern,
likely to express concern about the debt times more onerous. Lower earners
these aggregate measures mask a more
they hold (see figure 16). For example, 10-20k per ann m are also twice as
complex underlying picture. The FCA
compared to older borrowers 55 , likely to use credit to spend on essential
defines credit card c stomers to be in
25-34 year olds typically hold five times items and are twice as concerned about
persistent debt if they have paid more
more unsecured debt, are three times making repayments than those on
in interest and charges than they have
more likely to need to use credit to pay higher incomes 50k .
repaid of their borrowing over an 18
for essential items and are three times
month period.
more worried about their ability to repay
their debts in the future.
Figure 16: Comparison of individual debt circumstances and areas
of concern across consumer groups
Average individual unsecured debt (£) Average individual unsecured debt
to income ratio (%)
Overall
5,389 29
Age 52
25-34 11,485
55+ 2,075 10
Income
£10,000 – £19,999 5,524 38
>£50,000 5,668 9
Region
North 6,206 31
South* 6,084 24
Home ownership
Rent 8,503 46
Own (with mortgage) 5,451 17
ource consultation paper onsultation on persistent de t and earlier inter ention remedies pu lished on
12 PwCr s rvey also identifies that those
who rent are much more concerned.
Compared to owners with mortgages,
renters are close to twice as likely to
have needed to pay for essential items
on credit and to be worried about
their ability to repay f t re debt.
ercentage of ad lts that agree with the following statements %
I have needed to use credit I am worried about my ability to make
to pay for essential items repayments on debt in the future
(e.g. food, bills etc.) in the
past 6 months
12 18
20 20 28
6 10
16 19
8 9
11 19
11 17
19 19 29
11 18
*includes London
ource w ur ey
Are Britons borrowing beyond their means? – Precious Plastic 2017 137. Consumers lack For some, a rise in interest rates could
understanding of the lead to a significant increase in the cost
of repayments. For those on tracker
implications of interest rate mortgages or paying their lender’s
rises and may be under- standard variable rate, a 1% increase
prepared in the base rate may lead to an annual
increase in repayments of around
While there is currently a relatively £1,000 (assuming £150,000 mortgage
low level of bad debt, record levels of over a 25-year term 10, a stretch that
employment and the overall debt to some, especially with the backdrop of
income still well below its pre-crisis falling real wages, may find diffic lt
peak, how well prepared are consumers to absorb.
for a change of circumstances?
Households are increasingly turning
to borrowing ahead of saving, and Figure 17: Headline savings ratio (%)
are of course incentivised to do so by
6 Forecast
the low interest rate environment.
The household savings ratio has
fallen significantly since 2010 and is
4
projected to remain negative for the
ne t five years (see figure 17). With
lower savings, households may be less
2
prepared to respond to a change in
circumstances e.g. losing their job or
interest rate rises.
0
The Bank of England has recently
signalled intent to raise interest rates,
yet o r ons mer redit onfidence -2
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
rvey reveals cons mers do not f lly
nderstand the implications. 7% of
adults we surveyed felt they had a good *savings ratio excluding pensions
understanding of how an increase in ource
the base rate would impact their loan
repayments – yet only 12% correctly
answered a estion testing their
actual understanding. This disconnect Figure 18: Comparison of perceived and actual understanding of the impact
between their perceived and actual of a change of interest rates (%)
understanding of the impact of rate 67
rises see fig re 1 , may give lenders
ca se for concern.
12
Stated: “I understand how a rise in Correctly answered the question:
the base interest rate will impact loan “Please imagine that you have a
repayments (i.e on credit cards, £200,000 tracker mortgage, which has
mortgages and personal loan bills)” 25 years remaining. Your interest rate
tracks 1% above the Bank of England
base rate, which is currently 0.25%.
Imagining that the Bank of England
increased the base interest rate to 1%
Approximately, how much EXTRA do
you think you would pay back over the
remaining 25 years in interest?”
ource ou o w analysis
ouncil of ortgage enders
14 PwC. evels of financial literac Furthermore, during our recent Citzens’ he introd ction of financial ed cation
in the UK are low and ry on iss es within the financial to the national curriculum in the UK in
services sector, members of the public 2014 can be seen as a positive progress.
consumers can struggle to highlighted that the complex language However, over-three arters of
estimate the actual cost of sed by the financial ind stry makes teachers surveyed by The Money Charity
borrowing it seem too distant and out of touch reported little or no improvement since
for them to properly engage with and its introduction.
r ons mer redit onfidence understand it.
rvey reveals a wide range in the level As Britain’s debt burden expands
of nderstanding of basic financial The UK scores below the OECD average f rther, the importance of financial
prod cts. hile 72% felt they had a for teaching financial literacy. st % literacy as a crucial life skill is
good understanding of credit cards, just of the adults we surveyed said they had only increased.
57% felt the same abo t mortgages and received any formal education at
35% about payday loans (see figure 19). school about how to manage their
personal finances.
While generally respondents felt they
had a good understanding, far fewer
correctly answered simple estions Figure 19: Percentage of adults who
that tested their understanding of 80
the actual cost of borrowing on these 72
72
products. This lack of understanding
64 58
was particularly acute for younger 57
respondents (see figure 20). 56
48
Just 4% of people correctly estimated 40 35
32 33
the repayment value for a payday 32
loan from a choice of fo r options , 24 21
indicating that the use of the APR
16
measure may not be as suitable for
this product. 8 4
0
Credit cards Personal loans Mortgages Payday loans
Feel they have a good understanding of Correctly answered questions on interest
the following financial products repayments for these products
ource ou o w analysis
Figure 20: Percentage of adults, by age, who
80
72
66 64
64
56 51
48 46
40
32
32
26 24
24 21 21
17
16
8
0
18 – 24 25 – 34 35 – 44 45 – 54 55+
Feel they have a good understanding of a Correctly answered a basic question
particular financial product a out repayment on the financial product
a erage of results for credit cards personal loans mortgages and payday loans
ource ou o w analysis
Are Britons borrowing beyond their means? – Precious Plastic 2017 15Conclusion
While total unsecured debt has It is important to note that a
reached a new all-time high, the significant portion of the growth
analysis in our report paints a in unsecured debt has been driven
mixed picture in terms of just how by student loans. While student
worried we should be. debt will of course weigh heavy
on those who hold it, repayment
The overall debt to income ratio, is dependent on reaching certain
while relatively high at 147%, income thresholds and loans
remains well below the pre-crisis come with a maximum term (after
peak, and this fact, combined with which as residual outstanding
the still benign macroeconomic amo nt is written off . rg ably,
backdrop, perhaps doesn’t give therefore, student debt should
rise to immediate concern. not be considered as e ivalent to
However, o r redit onfidence other forms of unsecured lending.
rvey clearly reveals that certain Looking at the underlying picture
segments are already under more without student debt reduces
pressure than others e.g. younger the overall position from around
borrowers and renters who have £300bn to £200bn, which is
a relatively higher debt to income broadly the same level reached
ratio and are substantially more before the financial crisis in 200 .
concerned about their ability
to repay. With this in mind, the current
trajectory and affordability of
With interest rate rises on the unsecured debt will remain a
horizon, and macro-economic hot topic.
risks to the downside, it will be
important for all borrowers to be
prepared for a potential change
in circumstances. Our Credit
onfidence rvey indicates a poor
level of understanding in terms of
the implications of base rate rises
and a concerning level of financial
literacy, with around three
arters of borrowers ro tinely
underestimating the true cost
of borrowing.
16 PwCContacts
Simon Westcott lead a thor John Lyons Nick Forrest
Retail Banking, Retail and Commercial Banking Leader Economics and Policy
trategy john.r.lyons@uk.pwc.com nick.forrest@pwc.com
simon.e.westcott@uk.pwc.com 44 0 20 7 02 5071 44 0 20 7 04 5
44 0 75 5 10434
Richard King co a thor Isabelle Jenkins
trategy Banking and Capital Markets Leader
richard.j.king@uk.pwc.com isabelle.jenkins@uk.pwc.com
44 0 20 7 04 1 44 0 20 7 04 2742
Are Britons borrowing beyond their means? – Precious Plastic 2017 17www.pwc.co.uk/preciousplastic
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