27 UK debt statistics 2024: how much debt is the UK in?

The amount the government owes that has built up over the years is called national debt. Not only is the UK government indebted. The costs to service this debt are enormous.

Government finances are linked to personal debt. An indebted government may decide to spend less on key public services like protection for those who struggle financially.

At Invezz.com we have traced the link between UK national debt and the debt of families and people. Here are our findings, always backed by research & statistics.

Key takeaways

• UK national debt is expected to grow to £2.5 trillion in 2023 and £2.7 trillion in 2024, an increase of about 80% from a decade ago.
• Between 2023 and 2028, UK national debt is projected to grow by 30%, reaching £3.2 trillion in 2028.
• The ratio of UK debt to GDP is expected to remain above 100% by 2028.
• Nearly 25% of UK national debt is tied to inflation, meaning that the government pays more when inflation roars.
• In 2023, the UK is expected to spend 10.4% of total government revenues on servicing its debts due to the high proportion of inflation-linked debt.
• In 2023/2024, UK government spending is expected to reach £1.2 trillion, double the amount spent in 2000/01.
• In 2022, UK household debt represented 146% of disposable income, meaning that families are significantly more indebted than their incomes suggest.
• Among G7 nations, UK households have the second-highest debt-to-income ratio.
• The average personal debt per person in the UK reached $52,243 in 2021.
• Millennials are the most indebted generation, with 80% having a kind of consumer credit product.

UK national debt statistics

1.  By the end of 2023 UK national debt will  be up 80% from a decade ago. 

Since the economic recession of 2007-08, the gap between governmental spending and revenues has rapidly widened. So, how much debt is the UK in?

UK national debt is expected to reach £2.5 trillion in 2023 and £2.7 trillion in 2024. Following the pandemic and Russia’s war in Ukraine, the government borrowed and spent its way out of the crises. The bill for that is becoming a worry.

The UK national debt, which amounted to £1.4 trillion a decade ago, will continue to climb over the next five years. 

Source: International Monetary Fund

2. Between 2023 and 2028, UK national debt will grow by 30%.

In five years, debt is projected to grow by a third from where it stands now. The amount of cash borrowed by the government is forecast to reach £3.2 trillion in 2028, more than it has ever been. 

Source: International Monetary Fund

3. The budget balance is projected to amount to -£118.25 billion in 2023.

According to the IMF definition, the budget balance indicator describes the difference between the government’s total revenue and its total expenditures. 

In 2020 budget balance hit its lowest at -£274.4 billion, and has been gradually increasing since then. The trend is likely to persist over the next five years.

Source: International Monetary Fund

UK debt to GDP statistics

4. The ratio of UK debt to GDP will keep exceeding 100% by 2028.

How much debt is the UK in has been a topic of concern for policymakers and citizens alike. But what’s even more important is the amount of national debt comparable to the UK economy. The ratio of UK debt to GDP may still decrease, despite a budget deficit. 

This is not the case with the UK over the next five years. By the end of 2023, national debt will represent 104.1% of national income. Between 2023 and 2028 public debt in relation to GDP is set to increase by 4.1 percentage points. 

2020 was the first year since 1961 when the UK national debt exceeded the size of the economy, reaching 104.6% of GDP. Debt levels rose sharply during the first year of the pandemic as the UK took action to battle coronavirus. 

Source: International Monetary Fund

5. In 2022, the ratio of UK debt to GDP was about 2 times smaller than that of Japan.

The UK is certainly not the only big spender. To set the ratio of UK debt to GDP in context, we compared it to other major economies globally. 

As of April 2022, the national debt of Japan was 261.3% of the national income. This greatly exceeds the UK’s 102.6%. The US and France are other two prime examples of countries that spend more than their annual GDP.

Source: International Monetary Fund

UK national debt composition statistics

6. Almost 25% of UK national debt is tied to inflation.

While the debt of many countries is more as a percentage of their GDP, the UK stands out for a worrisome factor. Nearly a quarter of debt is “index-linked”, or tied to inflation. As UK prices soared amid the cost of living crisis, government repayments and inflation-linked bond interest also increased.

So, there are indeed other G7 countries like Italy that owe significantly more than the size of their economy. However, Italy has just 12% inflation-linked debt, or 2 times less than the UK, making it less vulnerable to inflation.

Source: Fitch ratings

7. In 2023 Britain will spend 10.4% of total government revenue to service its debts.

Roaring inflation paired with the unusually high share of index-linked debt put the UK in this unfortunate position. The UK is on track to pay £110 billion in 2023, the highest debt interest in the developed world. This represents about 10% of the government revenue.

Source: Financial Times

8. Above a quarter of UK government debt is short-term.

The government borrows money by selling gilts. Gilts are bonds and can be best described as a promise to pay money in future.  

Along with index-linked gilts (23%), the composition of the UK government debt will be dominated by short-term (28%) and long-term (25%) gilts in 2023 and 2024. As of medium-term gilts, their share is just 13%.

Having a substantial portion of short-term debt exposes the government to a higher risk if external conditions worsen. So, the government is aiming to land at a long average maturity debt portfolio. 

Source: HM Treasury

UK Government spending statistics

9. In 2020/21 government spending peaked at 53% of the GDP, up from 40% in the previous financial year.

In the first year of the pandemic, the UK government spent about £1.1 trillion, or more than half of its income for the first time since 1945/46. In 2022/23, amid the Russia-Ukraine war, there is again a jump yet not that drastic. 

Source: Office for Budget Responsibility

10. In 2023/24 UK government spending is expected to reach £1.2 trillion.

This is 180% more than the £426 billion in 2000/01. Following the onset of the pandemic, the government has been spending more on health, but also on economic affairs, social protection, public order and safety, and environmental protection, although the increase in these categories is modest.

Source: HM Treasury, Office for Budget Responsibility

11. In 2023/24 the government will spend the most on social protection (£341 billion), followed by health (£245 billion) and education (£131 billion).

The big share of social protection services can be explained by Britain’s ageing population, which requires more money for old age pensions. Along with elderly people, other vulnerable groups like the unemployed, poor, and sick rely on the government’s money for social protection.

High interests on the UK national debt mean that the government may decide to spend less on key public services. Tough decisions will be made at times of high inflation when workers need help to cope with the growing cost of living. 

Source: HM Treasury

UK household debt statistics

12. In 2022 UK household debt represented 146% of disposable income

Household debt is defined by OECD as all liabilities that require payments to creditors, such as loans and consumer credit. 

Just like the government, people in the UK spend more than they get. In 2022 the debt of families represented 146% of their net disposable income. 

1996 was the last year when family income exceeded debt. The ratio hit its highest at the onset of the 2007-08 economic recession at 175%. Since then, it has gradually declined, although never returning below 100%.

Source: Organization for Economic Co-operation and Development

13. In 2023 the savings rate of UK households will drop to 7.5%. 

Having debt does not necessarily mean that you can’t save. But saving rates among UK families are modest and declining. They are expected to save about 7.6% of their disposable income in 2023 and 7.5% in 2024. 

This is two times less than the 2020 levels when families’ gross savings accounted for 15.8% of income. The lack of a social life, coupled with the fear experienced during the first year of the pandemic, greatly contributed to saving behavior.

Source: Organisation for Economic Co-operation and Development

14. UK families have the second-highest debt-to-income ratio among G7 nations.

Spending and saving behavior greatly differs across societies. While the average household debt in Canada represented 187% of families’ income in 2022, the UK came second at 146%. 

Meanwhile, families in Germany and Italy owed less than what they made in 2022.  

Source: Organization for Economic Cooperation and Development

15. 17% of lowest-income UK households struggled with bills or credit commitments in 2018-2020.

It comes as no surprise that between 2018 and 2020 poor families had more household debt than wealthy families. What they didn’t have was property debt, perhaps because they didn’t have property.

By contrast, 17% of lowest-income households faced problem debt, meaning that they were falling behind with bills or credit commitments. This issue is literally non-existent among top-earning deciles. 

Source: Office for National Statistics

UK personal debt statistics

16. The average debt UK people have to shoulder was $52,243 in 2021.

Since 2010, the average UK adult debt has gravitated around $50k. In 2021 Brits owed on average $52.2k to banks, credit card firms and other lenders.

In 2013 personal debt peaked at $54.3k, while 2016 saw the lowest figure of $44.4k.

Source: Credit Suisse

17. In 2021 just 26% of Britons stated that paying personal loans is a key priority.

When asked to pick up top financial priorities for the near future, about a quarter of UK consumers said paying off their debts. 

To set this in context, for 39% of Americans debt is a top consideration. By contrast, people in Italy (21%), Germany (20%), and France (18%) share Britain’s laid back attitude towards debt.

Source: YouGov

18. In 2021 Britons made 67 credit card payments on average.

Up until the pandemic, there was a consistent upward trend in credit card usage. When COVID-19 hit, Britons started to reduce their credit card reliance, paying off debt and limiting the number of payments by roughly 20%. 

Once lockdowns were lifted, people in the UK went back to their credit card habits, and the number of transactions nearly recovered.

Source: Statista

19. On average, those in need owed £5,751 for mortgage in 2022.

Most of Brits’ overdue money came from mortgages, according to data from the 187,278 people in need who asked for debt help from the charity Step Change. On average, people with mortgage overdue owed the staggering amount of £5,751 in 2022. This is 28% more than the 2021 average of £4,497.

Debt can be either unsecured or secured. Mortgages are a type of secured debt, meaning the bank owns a part of the house until the borrower pays it back. Unsecured debt tends to have higher interest rates due to increased risk. However, secured debt puts a large fraction of the already vulnerable population at risk of losing their property.

Source: Step Change

20. In 2023, English university graduates will carry an average of £44,940 in student loan debt.

England’s higher education is world-famous yet it leaves young people in unbearable debt. Students graduating in 2023 will have to endure an average of £44,940 of student loan debt, compared to £15,430 in Scotland.

Unlike their English counterparts, Scottish students do not generally pay tuition fees for universities. However, they can pay for some further courses, and that’s when the services of the Student Loans Company are required.

Source: Student Loans Company, BBC

21. Most Brits are in debt due to the cost of living crisis (18%) and the related lack of control over finances (20%).

Unemployment (14%), reduced income (12%), and injury or health issues (11%) are other frequently reported problems.  

Source: Step Change 

22. Millennials are most likely to be in debt.

Contrary to expectations, Gen Zers under 25 years are not the most indebted generation. Four in 5 Millennials aged 25-34 have some kind of financial debt , compared to 71% of Gen Zers. 

Baby Boomers and the Silent Generation are least likely to be indebted. Just a third of Brits aged 65-74 have a credit card or other consumer credit product. The percentage falls to 18% among citizens above 75 years.

Source: House of Commons Library

23.  Millennials are most likely to be in debt and struggling with it.

Millennials are also the most frequent clients of the Step Change charity, asking for debt help. They account for just 11% of the charity’s client population. 

Millennials between 25 and 39 years are over-represented, accounting for 48% of all clients. They potentially face a wider array of issues related to work and family, making them look for help.

Source: Step Change

UK BNLP statistics

24. In 2022, BNPL accounted for an 8% share of total UK e-commerce payments.

Buy Now Pay Later (BNPL) schemes, while convenient for consumers, generate significant amounts of debt among Britons. 

Up until 2016, they were literally non-existent, accounting for just 1% of total e-commerce payments. As of 2022, the market share of BNPL jumped to 8%.

Source: FIS Global

25. The average monthly debt UK Gen Zers owe to Buy Now Pay Later schemes is £208.

In 2022 BNPL users accumulated an extra £160 in debt monthly due to these schemes. Gen Zers in particular had the highest volume of BNLP debt in 2022 at £208 on average. Following are Millennials at £175. Consumers aged 65+ years are least susceptible to being indebted to BNLP schemes.

Source: Forbes

26. In 2022 about two in five Gen Zers used Buy Now Pay Later schemes to afford fashion trends.

Britons mostly use BNPL mostly to buy fashion and electronics. Young people are most susceptible to generating monthly invisible debt. About 39% are using BNLP to afford the latest fashion and keep up with trends. This is their main buying option when they are short on cash and can’t buy the hottest items. 

Source: Forbes

27. About a quarter of BNLP users reported missing monthly payments in 2022.

The issue with BNLP is that if people don’t have the money now, they probably won’t have it later. About 24% of consumers missed monthly payments in 2022, a figure that raises to 41% among Gen Zers. Those most eager to have things are also most vulnerable to debt. 

Source: Forbes

Final thoughts

This article paints a concerning picture of the UK national debt. The government is expected to owe £2.7 trillion in 2024. But it’s not only about how much debt is the UK in. Debt composition is unique to the country, and not in a flattering way. The high proportion of inflation-linked debt translates into more money from taxpayers poured on servicing debt.

An indebted government may be forced to spend less on the services people need. Britons’ personal loans are already astounding, and the average debt UK citizens carry stands at about $52k. Many may struggle with the economic challenges of 2024, requiring the help of a government that manages its finances and debt wisely.

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