Is debt considered normal these days?

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Just that, really.

We have a car on finance (good deal) and mortgage but otherwise refuse to buy anything on credit - no pay later, overdrafts, credit cards etc. As soon as the car is paid I wouldn’t get another on finance either (husbands idea to do it and I don’t want to again!).

If we want something like a holiday, new furniture whatever we save for it.

A good friend of mine recently shared with me that her and her husband have just under £30k on credit cards, plus a holiday for £4K that needs paying before the summer. Plus car plus mortgage.

She said this without a care in the world - as though it was normal and she’d pay it off later.

They’re good earners so I think they must be living hugely out of their means but she seemed shocked that I was shocked by it?! I hate the car finance as it is and think I would feel incredibly stressed with that credit card debt sitting over me?

I know there’s an element of keeping up with the Joneses etc but I was so surprised (she spends a lot, regularly posts her days out etc on social media).

There's quite a lot of stats out there on credit card/debt if you're interested which will probably provide a better overall view than asking individuals on MN.
e.g
Credit Card Statistics 2023 - Credit Card Facts and Stats Report | money.co.uk

approx-83% of people in the UK own at least one credit card or loan product (which would include your car finance OP)

Further down the page it breaks it down by types of users, e.g. those who rarely use their card, those who pay it off in full every month, etc - however the biggest group by far (31.5%) are users who only pay the minimum off every month and therefore amass debt quickly. There are also another 11% who pay more than the minimum but not their full amount so will also incur some interest.

So yes, OP, in a nutshell, the vast majority of the UK have some sort of credit product and, of these just under half of these don't pay off their balance in full and will be amassing debt.

UK credit card debt reached £66.4 billion in June 2023
BUT that doesn't mean that everyone is 'in debt'.
e.g. your car finance would be included in that, but as you are paying it off within the agreed timescale you probably wouldn't consider yourself to be 'in debt' as such and won't incur added interest.

However despite that I still agree with @Anyotherdude , if you are 'responsible' (for lack of a better word) with money, the MOST financially prudent way IS to have a credit card rather than to avoid it completely, for lots of reasons - the added protections it gives you on purchases over £100, to build up your credit rating, and because it can even make you money (cashback/bonus points/incentives/by "stoozing") etc. If you set up an automatic dd there is literally no risk.

I remember in 2002 I could regularly save a good £400 pcm out of my 28k salary. That was alongside a mortgage in the outskirts of London plus comfortably run a car. I could go abroad too. All on one income.

How times have changed.

We do have a credit card, we use it for the extra protection it offers and to collect avios points, but we always pay it off in full.

Yes, I agree. Not everybody did save, but there was a lot more opportunity to do so, than there is in today's world, where people are working two jobs and can not even get a house. They work, work and work, and still cannot save. You have to earn ALOT more money today than you did back then. The same grades of jobs and th lifestyle they brought does not match that of today. The cost of living is simply too high.
I cannot stand boomers rattling on about instant gratification, when they are the ones that took 100 percent mortgages, had the means to save, and sit fully owning their houses today, with expendable cash. I admire those that recognise that young people live in an impossible predicament, unless they earn a very high wage/help from family, they're basically working to survive.

short answer - yes a large amount of people are in debt, although your friend's £30k is probably higher than the norm. Whether you consider it 'normal' or not is subjective to the individual.

Debt isn't also automatically 'bad' if it's agreed debt that isn't incurring interest, or even if the interest incurred is less than the amount of interest paid for the equivalent cost in savings.

The interest we all pay on our mortgages (if have one) is phenomenal (different rates obviously). We’re all basically paying thousands of pounds a year to the fat cats, the billionaires who own the banks. That’s one way they get fatter.

I used to stick my head in the sand about this but when I asked the bank for a statement of interest paid the previous few years (it’s always available), it made me feel stupid. We’d paid many many thousands to the bank in interest (above the basic repayment), and still are doing.

Yes the house goes up in value, we’ve done well, but from then on our aim was to over-pay on the mortgage as much as feasible (so interest fees on the mortgage are reduced as is the mortgage term itself), til we pay it off and are mortgage free.

Paying money to the banks for nothing - they take us all as fools for sure.

There’s no doubt many people are living beyond their means, remortgaging over and over, credit cards, finance deals etc.

We use a credit card to buy food, holidays etc, then pay it off at the end of each month. Again anything other than that - is giving free money to the banks.

OP there are is data available on the amount of household debt etc that would literally answer your question.

i also think it sounds like a bit of a question from the 1970s- did you not notice the financial crash of 2007 because people had so much credit?!

obviously debt has always been common, most commonly mortgage debt and other high value purchases like cars and home improvement works.

im another who doesn’t see the problem with credit provided you can afford it.

Btw it’s very common for poor people to be terrified of debt.

it takes quite a lot of experience - in business and finance and exposure to different types of people and finances- to get the diversity to question and interrogate that fear, and maybe remove some of it and use debt to enhance your life.

sometimes it takes more than one generation

Young people would need to keep their credit rating top notch if they hope to stay living in private rent. I wonder how they in fact manage since many on you tube say they have debts just to survive.

Not if your parents raise you properly, then no debt isn't the norm.

I think these days the chance of losing your house if you have a mortgage and kids is vanishingly small provided you don't do something incredibly irresponsible.

That's not to say it would be recommended to do though, because it would probably have a severe impact on your housing equity as well as limit your choices to upsize/get more loans in the future.

Credit cards/agreements raise credit scores, as long as they're paying something each month.

Yes, your 100 percent mortgage, car and conservatory in with it parents, that could afford to save and support a household on one working average wage.

As well as the ‘middle class’ people trying to beat the jones’ for who has the best car / house / extension / holidays / school..

We also have Pay day loans, credit cards with eg. 36% interest - prey on desperate people. Who then get more into debt..

Our society is built on interest building debt sadly ..

Me and DP are mid-30s, and we just have a mortgage. We do have credit cards but never carry a balance. I’d rather not even have the mortgage 😂

Peoples attitudes to money are so vastly different. My view is so polar opposite to my parents for example so I don’t think it is necessarily how you are raised.

I have friends who finance everything from the car to the kitchen. I have always been slightly surprised by this given that some of these couples are high earners.

Similar to our situation too. It’s a no brainer!

Yes, dh and I ate asda smartprice (which was pretty new at the time) for a afew months and we saved to go on two long haul holidays. Now people eat like this to simply survive.

I bet they're in a cycle of repeatedly paying off debt, meaning they don't have the expendable cash. Maybe it has been accumulating for a number of years?

We've only ever had our mortgage debt, and that's paid off now. I know it means that our credit rating is a bit lower than it could be, but as I'm not looking to borrow, I don't really care. People have very different comfort levels when it comes to debt.

My car's on 0% finance, I had the money saved to buy it outright but it made sense to buy it on finance and pay the monthly repayments out of the money saved to buy a car. I felt that by doing that I was earning interest on my savings while still having the car I wanted. No other debts, I do use a credit card but pay it off in full each month. I have had debt in the past and never want to go back there.

I’ve had debts since I started work at 16 in 1974 so have never known anything else until the last five years or so. I think everyone I know has had debts to some extent, but I’m not sure the level of debt is any greater now that in the past

It’s not quite as simple as that though, is it?
I don’t have debt and have never had any debt. But I went to university in the 80s on a full grant with no fees and graduated debt free. Dh and I lived off one salary and saved the other so had a decent buffer if anything happened to car or boiler.
it’s always a combination of factors with luck also playing a part.

Some interesting responses. Thanks for those links to stats! I’ll read through them.

I think 0% for things makes sense. Also emergencies as cost of living etc means sometimes it’s just not possible to do anything else when something arises.

The surprise for me is the constant lifestyle purchases adding to it.

For us it is a cash flow management type thing so our debts are 100% manageable and very short term. Amd we could afford to repay them within a couple of month. So if you do that then it s a very good way to manage your cash flow. Only 2 yrs left in mortgage though so we would never have done that before.

But things like holidays, new furniture, building works, etc are never paid on CC. We save so we have a lot less fancy holidays that our friends in similar earning brackets.