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Characteristics of households in problem debt

David Sturrock, Andrew Hood and Robert Joyce

There is increasing concern about the sustainability of household debt. We analyse the debt holding position of UK households, setting out a definition of "problem debt" and analysing those households captured by this measure. We find that "younger" and poorer households are more likely to be in problem debt. Our measure of problem debt highlights that focus on metrics such as overall debt or overall debt compared to income do not account for the different repayment terms of different debts and that examinig and meaure of based on the share of income that household devote to servicing their debts has important implications for which households are identified as facing problems.