Total credit card debt in the UK grew by over ****billion British pounds between March and April 2025, now reaching a similar level of debt as seen in early 2020. The annual growth rate of credit card debt stayed about the same in April 2025, reaching *** percent when compared to aApril 2024. The growth rate in 2024 has been decreasing until 2025 where it started to increase again, which may potentially be attributed to growing interest rates and the cost of living crisis.

The UK's average credit card debt per household grew by *** British pounds between December 2021 and December 2022, the first increase since 2020. Standing at ***** British pounds at December 2022, the figure contrasts with the decline in 2020 – when the debt declined from ***** British pounds to ***** British pounds. That particular drop was likely a result of Covid-19's economic impact, and consumers trying to get rid of their credit card debt. The increase in 2022 may be caused by growing interest rates and the cost of living crisis beginning to take shape.

Key information about United Kingdom Household Debt: % of GDP

• United Kingdom household debt accounted for 81.6 % of the country's Nominal GDP in Sep 2024, compared with the ratio of 81.8 % in the previous quarter.
• UK household debt to GDP ratio is updated quarterly, available from Mar 1987 to Sep 2024.
• The data reached an all-time high of 108.5 % in Mar 2010 and a record low of 55.6 % in Mar 1987.

• In the latest reports, UK Household Debt reached 3,076.4 USD bn in Sep 2024.
• Money Supply M2 in UK increased 2.2 % YoY in Dec 2024.
• UK Foreign Exchange Reserves was measured at 112.5 USD bn in Jan 2025.
• The Foreign Exchange Reserves equaled 1.4 Months of Import in Oct 2024.
• UK Domestic Credit reached 4,866.2 USD bn in Dec 2024, representing an drop of 1.3 % YoY.
• The country's Non Performing Loans Ratio stood at 1.0 % in Dec 2022, compared with the ratio of 1.0 % in the previous year.

The average credit card purchase value in the United Kingdom was over ***British pounds as of May 2025. This was slightly lower than in the same month of the previous year and lower than in January 2023, when it reached an all-time high, with each individual credit card transaction averaging **** British pounds. This contrasted with April 2020, when coronavirus measures caused the average credit card value to decline. However, the total credit card debt in the UK in May 2025 grew almost six percent year-on-year.

In the first half of 2024, the total value of debt from loans to households in the United Kingdom amounted to approximately ************ British pounds. It was in 2004, when household debt surpassed the ************ British pounds mark. Debts can be formed in a number of ways. The most common forms of debt for households include credit cards, medical debt, student loans, overdrafts, mortgages, automobile financing and personal loans.

Key information about United Kingdom Household Debt

• United Kingdom Household Debt reached 3,076.4 USD bn in Sep 2024, compared with the reported number of 2,873.8 USD bn in the previous quarter
• UK Household Debt: USD mn data is updated quarterly, available from Mar 1987 to Sep 2024
• The data reached an all-time high of 3,298.5 USD bn in Jun 2008 and a record low of 406.9 USD bn in Mar 1987

• In the latest reports, United Kingdom Household Debt accounted for 81.5 % of the country's Nominal GDP in Sep 2024
• Money Supply M2 in United Kingdom increased 3,931.4 USD bn YoY in Oct 2024
• United Kingdom Foreign Exchange Reserves was measured at 115.5 USD bn in Nov 2024
• The Foreign Exchange Reserves equaled 1.4 Months of Import in Oct 2024
• United Kingdom Domestic Credit reached 5,119.2 USD bn in Aug 2024, representing an drop of 0.9 % YoY

Consumer Credit in the United Kingdom increased to 1692 GBP Million in August from 1669 GBP Million in July of 2025. This dataset provides the latest reported value for - United Kingdom Consumer Credit - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.

Daily, weekly and monthly data showing seasonally adjusted and non-seasonally adjusted UK spending using debit and credit cards. These are official statistics in development. Source: CHAPS, Bank of England.

As of late October 2024, most of the outstanding consumer lending in the United Kingdom (UK) were overdrafts, as well as loans and advances other than credit cards. Consumer credit peaked in February 2020, but dropped sharply two months later before slowly starting to recover again. The category other, which includes overdrafts and other loans and advances made up most of the outstanding credit. Meanwhile, credit cards amounted to approximately a third of the outstanding consumer loans. Nevertheless, credit cards made up most of the new monthly consumer lending in the UK. A likely reason for this discrepancy is that credit card debt tends to be paid in a shorter term than other types of credit.

Credit card issuance revenue is slated to dip at a compound annual rate of 7.3% over the five years through 2025-26 to £20.5 billion, including estimated growth of 9.5% in 2025-26. The cost-of-living crisis has been both a blessing and a curse – on the one hand, households have turned to credit cards to pay for necessities as disposable incomes have taken a hit; on the other, it’s caused a higher rate of default and a lower level of total spending. Rampant inflation has made revenue very volatile. Drops in disposable income have left households scrambling to pay for necessities, with the ONS finding that 21% of adults had to use personal loans or credit cards to afford their living costs across 2023-24. Credit card issuers earn a large portion of their revenue from interest income. When the Bank of England ramped up interest rates to curb spiralling inflation over the two years through 2023-24, issuers saw their revenue skyrocket. Although interest rate cuts occurred over 2024-25, the average rate issuers charged borrowers continued to climb, reflecting the rising number of defaults, and issuers seeking to maintain profitability after being forced to raise provisions to cover losses. Interest rates will continue to drop in 2025-26, but this will make borrowing more affordable and reduce the likelihood of defaults, supporting lending activity and aiding revenue growth during the year. The likely decline in defaults will also allow issuers to reduce provisions, lifting the average industry profit margin to 5.9% in 2025-26. Credit card issuance revenue is forecast to expand at a compound annual rate of 4.1% over the five years through 2030-31 to reach £19.3 billion. Demand for credit cards from younger demographics is set to pick up in the coming years, with TransUnion finding more Gen Z consumers getting credit cards in 2023 compared to Millennials a decade earlier, positioning the industry for solid growth. The intensifying threat of buy-now-pay-later platforms will also cool as the FCA clamps down on the industry, introducing new regulations that increase transparency and checks to ensure borrowers can repay their debt. Issuers will also seek to capitalise on the growing market of environmentally conscious consumers, using recycled plastics and biodegradable alternatives for credit cards. This will give smaller issuers a healthy source of competition to compete with more established companies, weighing on market share concentration.

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Debt Settlement Market Size 2024-2028

The debt settlement market size is forecast to increase by USD 5.07 billion at a CAGR of 10.3% between 2023 and 2028.

The market is experiencing significant growth due to the increasing trend of consumers seeking relief from mounting credit card debts. One-time debt settlement has gained popularity as an effective solution for individuals looking to reduce their outstanding debt balances. However, the time-consuming nature of negotiations between debtors and creditors poses a challenge for market expansion. Despite this, the market's strategic landscape remains favorable for companies offering debt settlement services. Key drivers include the rising number of consumers struggling with debt, increasing awareness of debt settlement as a viable debt relief option, and the growing preference for affordable and flexible debt repayment plans.
Companies seeking to capitalize on market opportunities should focus on streamlining the negotiation process, leveraging technology to enhance customer experience, and building trust and transparency with clients. Effective operational planning and strategic partnerships with creditors can also help companies navigate the challenges of a competitive and complex market.

What will be the Size of the Debt Settlement Market during the forecast period?

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The market encompasses a range of companies offering financial wellness programs to help consumers manage and reduce their debt. These programs include medical Debt collection, consumer debt relief, and financial education resources. Online financial resources and debt management software are increasingly popular, providing consumers with affordable debt solutions and debt negotiation strategies. However, it's crucial for consumers to be aware of debt settlement scams and their settlement success rates. Debt consolidation loans and financial planning tools are also viable options for responsible debt management. Furthermore, financial literacy education and workshops are essential for consumers to understand debt reduction calculators and credit reporting errors.
Consumer financial protection agencies offer financial counseling services and financial planning advice to promote financial wellness strategies and responsible borrowing. Student loan forgiveness programs are also gaining traction in the market. Overall, the market for debt settlement and financial wellness solutions continues to evolve, with a focus on providing accessible and effective debt relief options for consumers.

How is this Debt Settlement Industry segmented?

The debt settlement industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD million' for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.

Type

  Credit card debt
  Student loan debt
  Medical debt
  Auto loan debt
  Unsecured personal loan debt
  Others


End-user

  Individual
  Enterprise
  Government


Distribution Channel

  Online
  Offline
  Hybrid


Service Type

  Debt Settlement
  Debt Consolidation
  Debt Management Plans
  Credit Counseling


Provider Type

  For-profit Debt Settlement Companies
  Non-profit Credit Counseling Agencies
  Law Firms
  Financial Institutions


Geography

  North America

    US
    Canada


  Europe

    France
    Germany
    Italy
    UK


  Middle East and Africa



  APAC

    China
    India
    Japan
    South Korea


  South America



  Rest of World (ROW)

By Type Insights

The credit card debt segment is estimated to witness significant growth during the forecast period.

The market experiences significant activity due to the escalating credit card debt among consumers. In India, for instance, the rising financial hardships faced by borrowers are evident in the increasing credit card defaults. The latest data indicates that credit card defaults in India reached 1.8% in June 2024, a notable increase from 1.7% six months prior and 1.6% in March 2023. This trend underscores the mounting financial pressures on consumers. The outstanding credit card debt in India mirrors this trend, with approximately USD3.25 billion in outstanding balances as of June 2024, a slight increase from the previous year.

Debt elimination and negotiation strategies, such as debt relief programs and debt consolidation, have become increasingly popular among consumers seeking financial relief. Credit reporting agencies play a crucial role in this process, as they maintain and report consumers' credit histories to lenders. Student loan debt, medical debt, tax debt, and payday loans are other significant contributors to the market. Consumers often turn to debt validation, credit repair, and financial coaching for guidance in managing their debts. Online platforms, mobile apps, and budgeting tools have become esse

Clients seeking financial advice from the debt charity StepChange in the United Kingdom had on average approximately ***** British pounds of unsecured credit card debt in 2022. On average, the new clients of this charity owed more unsecured debt from personal loans than from any other type of credit.

United Kingdom UK: Net External Debt: Central Bank: Long Term: Trade Credit and Advances data was reported at 0.000 USD mn in Jun 2016. This stayed constant from the previous number of 0.000 USD mn for Mar 2016. United Kingdom UK: Net External Debt: Central Bank: Long Term: Trade Credit and Advances data is updated quarterly, averaging 0.000 USD mn from Mar 2016 (Median) to Jun 2016, with 2 observations. United Kingdom UK: Net External Debt: Central Bank: Long Term: Trade Credit and Advances data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s United Kingdom – Table UK.World Bank.QEDS: Net External Debt.

Debt collection revenue is influenced by the level of personal and business debt, demand for debt collection and debt recovery rates. Agencies have been transitioning from fee-based collection services to higher-margin portfolio acquisitions, bolstered by higher consolidation activity. However, portfolio acquisition is more within the reach of larger agencies. Debt collection services typically thrive during economic downturns, although recovering debts is more challenging. In tough economic times, more consumers and businesses struggle with debt, leading to higher delinquency rates. Creditors often sell these bad debt portfolios to third-party collectors, creating potential revenue for debt collection agencies. However, while there are more debts to collect, consumers often have limited income, making it challenging to recover full payments or even partial settlements. Moreover, stricter regulations, like 2021’s Debt Respite Scheme, have presented challenges for agencies looking to recover credit card payments. Revenue is forecast to fall at a compound annual rate of 4% over the five years through 2024-25 to £1.9 billion. In 2024-25, revenue is set to climb by 1.2%. The UK economy is improving in 2024-25, with stable inflation and better GDP rates, making it easier for debt collectors to recoup revenue. Although demand for services is counter-cyclical, recouping actual revenue is more likely during an economic upturn because disposable incomes tend to improve when the economy strengthens, making it easier for debtors to repay outstanding debts. Economic conditions are set to stabilise in the coming years, making it easier for debt collection services to recoup revenue. Revenue is forecast to swell at a compound annual rate of 2.8% over the five years through 2029-30 to reach £2.2 billion. Businesses will take on more risk and raise investments, while consumers raise their spending through credit cards. Consolidation activity and the switch towards portfolio-acquisition services will also continue to gain momentum. As inflation eases, debtors will be able to pay off their debts more quickly, boosting agencies' revenue.

United Kingdom UK: Gross External Debt: General Government: Long Term: Trade Credit and Advances data was reported at 0.000 USD mn in Jun 2013. This stayed constant from the previous number of 0.000 USD mn for Mar 2013. United Kingdom UK: Gross External Debt: General Government: Long Term: Trade Credit and Advances data is updated quarterly, averaging 0.000 USD mn from Mar 1999 (Median) to Jun 2013, with 58 observations. United Kingdom UK: Gross External Debt: General Government: Long Term: Trade Credit and Advances data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s UK – Table UK.World Bank: QEDS: Gross External Debt: by Sector and Instrument.

United Kingdom UK: Gross External Debt: Deposit Taking Corporations excl Central Bank: Long Term: Trade Credit and Advances data was reported at 0.000 USD mn in Jun 2013. This stayed constant from the previous number of 0.000 USD mn for Mar 2013. United Kingdom UK: Gross External Debt: Deposit Taking Corporations excl Central Bank: Long Term: Trade Credit and Advances data is updated quarterly, averaging 0.000 USD mn from Mar 1999 (Median) to Jun 2013, with 58 observations. United Kingdom UK: Gross External Debt: Deposit Taking Corporations excl Central Bank: Long Term: Trade Credit and Advances data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s UK – Table UK.World Bank: QEDS: Gross External Debt: by Sector and Instrument.

The 'BoE Consumer Credit' report in the UK measures the change in the total value of new credit issued to consumers, including credit card debt and personal loans.

Over the five years through 2024-25, credit bureaux and rating agencies’ revenue is slated to fall at a compound annual rate of 5% to £2.3 billion. Geopolitical issues, particularly the forced stoppage of operations in Russia, have hurt the industry, mainly through lower deal rates and lost synergies with companies’ Russian branches. This also ate into profitability, cutting off some of the highest-ticket deals, which are the most profitable for rating agencies. Brexit restructuring has further influenced the market, with companies being forced to split their UK and EU operations. At the same time, weak economic conditions have held impeded revenue – low confidence and the high interest rate environment have meant there’s been less borrowing across the economy over the past few years, meaning less demand for the services credit rating agencies provide. In 2024-25, revenue is anticipated to climb by 3.2%. Increasingly favourable economic conditions, interest rate cuts and an upturn in deal-making are expected to stimulate borrowing. This will feed through to higher demand for credit rating services, as lenders require credit checks prior to approving loans. Over the five years through 2029-30, revenue is forecast to expand at a compound annual rate of 2.7% to £2.7 billion. Mounting demand for ESG rating services, which have been brought in by a number of major rating agencies, will be a key driver of this growth. Additionally, falling rates and a likely end to skyrocketing inflation will provide a more suitable environment for borrowing, ramping up demand for credit rating services.

The number of times a person in the United Kingdom used a credit card for payments declined by roughly ** percent in 2020 but nearly recovered by 2021. Unlike the same figure for debit cards, the recorded credit payments in 2020 were lower than in the years leading up to COVID-19. This coincides with a trend in the UK of paying off credit card debt during lockdown.