Insights ¦ July 2025 Money Statistics

Key Take Aways

1. UK consumer debt has increased significantly, with total personal debt reaching £1,903.3 billion in May 2025, highlighting heightened credit utilisation among households.
2. The average credit card debt per household is £2,616, with outstanding unsecured debt contributing to ongoing financial vulnerability.
3. Changes in interest rates, including the Bank of England’s reduction of the base rate to 4.25%, have not yet translated into a reduction in high borrowing costs, especially for unsecured credit.
4. Housing affordability remains a challenge, with first-time buyer house prices rising by 3.6% annually and a 10-year savings horizon needed for the average house deposit based on current savings rates.
5. Mortgage arrears have decreased, yet repossessions still occur at notable levels, with 13.6 properties taken into possession daily.
6. Inflation persists above the Bank of England target at 3.6%, affecting the cost of living and potentially eroding disposable income.
7. The UK economy shows modest growth (0.5% in Q1 2025) amid mixed signals, with retail sales declining by 2.7%, raising concerns over consumer spending resilience.
8. Public borrowing remains elevated, with net borrowing of £57.8 billion in Q2 2025 and debt levels at 90.9% of GDP, implying ongoing fiscal pressures.
9. Income inequality sectors such as youth unemployment (12.2%) and NEET rates (12.5%) highlight ongoing gaps in labour market participation.
10. Financial inclusion issues persist, with 2.1% of adults unbanked and notable declines in physical bank branches, underscoring access challenges.
11. The cost of raising a child exceeds £39 per day for an average family, with low-income households disproportionately impacted by the poverty premium.
12. The overall economic uncertainty, influenced by external geopolitical and energy factors, continues to influence household financial stability and policy response.

Key Statistics

• UK inflation rate in the year to June 2025: 3.6%
• Average credit card debt per household (May 2025): £2,616
• Total unsecured debt per UK adult (May 2025): £4,390
• Average house price increase (year to May 2025): 3.6%
• First-time buyer house price (May 2025): £226,673
• Average mortgage interest rate (end May 2025): 3.87%
• House price in London (June 2025): £565,637
• UK GDP growth (three months to May 2025): 0.5%
• Public sector net debt (June 2025): £2,713 billion (90.9% of GDP)
• Unemployment rate (March–May 2025): 4.7%
• Private rental prices increase (year to June 2025): 6.7%
• Cost of raising a child in 2024 (per day): £39.54 for couples, £44.23 for lone parents

Key Discussion Points

• Persistent household indebtedness amid volatile interest rates and economic uncertainty.
• The interplay between inflation, consumer spending, and retail sales decline.
• The impact of housing cost barriers on first-time buyers and potential long-term savings implications.
• The effectiveness of monetary policy adjustments given high borrowing costs for consumers.
• Trends in mortgage arrears and repossession levels within a fragile housing market.
• The influence of global geopolitical and energy issues on UK economic stability.
• Challenges around financial inclusion, notably the decline in physical bank branches and the unbanked adult population.
• The rising cost of living and its implications on household financial resilience and debt levels.
• The significance of youth employment and NEET figures as indicators of labour market health.
• The ongoing fiscal pressures evidenced by rising public borrowing and debt levels.
• The role of financial capability initiatives in addressing poverty premium and promoting better money management.
• The potential for policy interventions to stabilise household finances and foster economic growth in a complex environment.

Document Description

This article provides a comprehensive overview of the UK’s financial landscape as of mid-2025, summarising key economic indicators, household debt levels, housing market developments, inflation trends, and fiscal metrics. It combines macroeconomic data with detailed insights into household financial behaviour, credit usage, housing affordability, and social inclusion issues, offering senior managers in financial services a strategic perspective on current challenges and future outlooks within the UK economy.