A lot, if not the majority of people in the UK live on credit, and it has been increasing year-on-year, except 2020, when consumers paid off billions of consumer debt.
I wonder whether the Covid recession has made many reconsider their strategy of living on the never-never and saving up instead for unforeseen circumstances. While it's a good thing for individuals, it spells problems for an economy that's geared to a debt mountain, as consumers who start to save will have less to spend while saving. Those who are addicted to debt, and therefore the worst risks, will be left for the lenders to deal with.
Banks and credit card companies will have their work cut out to find new ways of persuading us to borrow, but one hopes not. Also, it's not as if interest rates are that good, but it's better having cash on hand than borrowing, unless inflation eats away at the payments.
I make it a policy to always have savings at any one time of an absolute minimum of 6 months outgoings - preferably a year. That's been my cushion against a rainy day. Also, I have never gone beyond 2.5 times salary on a mortgage.
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