We're paying back more debt but still owe £8,000

A new survey paints a worrying debt picture, with the average Brit still owing almost £8,000.

The average unsecured household debt, not including mortgages, in the UK is now around £7,900, according to a survey by accountants PwC.

That’s despite us paying down our debts by an average of £355 per household in 2011 as the ongoing economic downturn saw us tightening our belts.

But the survey also reveals that younger people are struggling to live without credit. It found that 25% of the 25-34-year-old age group needed to use credit to pay for essential purchases.

And more than half of that age group admitted to concerns about repaying their borrowing.

The report also forecasts a rise in ‘alternative lending’, such as payday loans, as banks and other financial providers continue to restrict credit.

But one in three of the people surveyed said they expect to not have to use a credit card, personal loan or overdraft in the future.

PwC actually forecasts that we’ll still have £7,500 of unsecured debt per household next year.

The report also forecasts that free banking in the UK will eventually come to an end.

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