The National Audit Office’s reports on savings and debt in the UK are not the most thrilling reading one can find on the internet. Nor are they the most obvious guides for business decision making. Indeed, often the numbers are so huge, and the presentation so abstract that it’s hard to relate them to real experience in any way at all. They are the very opposite of sensationalism and clickbait.
Nevertheless, the most recent report contained one quite startling statistic– that there are 8.3m people in the UK who are classed as being unable to pay off debt or household bills. Not struggling to, but unable to do so. That does not account at all for the undoubted millions more for whom debt has impacted severely on their disposable income. All of these individuals are people whose ability to participate in the consumer economy has been severely curtailed. People, indeed, for whom the purchase of anything but essentials may be challenging. Even for those well in control of their debts, the overall household debt figure of £1.6 trillion is startling – something in the region of the UK’s entire GDP. After all, all debt has to be paid for and, even at rock-bottom interest rates, that figure represents a significant sum going to financiers, and not into the ‘real’ economy.
For those at the helm of consumer-facing businesses, and leading those that supply to them, this is indeed that sort of information that ought to inform business decision-making. It indicates that not all of the apparent vitality and growth in the economy is entirely what it seems – that much of it is borrowing from the future, but also that it lags and will continue to lag behind all of the other forward-looking indicators. That is something that leaders of B2C organisations will have to take into account in long-term planning – another challenge that must be priced into commercial projections, and another aspect of the case for efficiency and good financial discipline in all respects.