The House of Commons Library has just released its monthly economics indicator that can be seen here. In summary:

Household debt at lowest level since 2008 peak

Household debt as a share of disposable income has continued to fall.

• Debt peaked in Q3 2008 at 155.8% of household disposable income.
• By early 2016, the ratio had fallen to around 135%.
• As of Q2 2025, the debt-to-income ratio stands at 117.1%, its lowest point in nearly two decades.

This decline reflects a combination of slower borrowing, higher repayments, and more cautious lending standards.

Mortgage rates ease slightly

Despite remaining elevated, average mortgage rates are lower than a year ago:

• The average Standard Variable Rate (SVR) was 6.86% in August 2025, down 1 percentage point year-on-year.
• The average 2-year fixed rate was 4.13% in August 2025, down 0.67 percentage points compared with August 2024.

Falling rates are beginning to ease affordability pressures for borrowers, though mortgage costs remain high by historic standards.

Individual insolvencies on the rise

The number of individual insolvencies in England and Wales rose to 30,494 in Q2 2025, up 1,639 on the previous quarter and 3.2% higher year-on-year.

Elsewhere in the UK:

• Scotland recorded 1,673 insolvencies in Q1 2025, down 11% compared with the previous year.
• Northern Ireland saw 392 insolvencies in Q2 2025, up 3% on the year.

Outlook

While household debt levels have steadily improved since the 2008 financial crisis, the recent uptick in insolvencies suggests that some households remain under acute financial pressure, particularly in regions where incomes have not kept pace with living costs.

With borrowing costs expected to moderate further if the Bank of England cuts rates in the coming quarters, the balance between falling household debt and rising insolvencies will be a key trend to watch into 2026.