Is the UK's household debt to income ratio the highest in the world?

20 September 2011

"[Gordon Brown's] British model of growth...led to the highest level of household debt in relation to income in the world", Vince Cable, Lib Dem Conference, 19/09/2011

In the last few years we have heard much from politicians about the need to "tighten our belts" and both in terms of household and national budgets. But is Vince Cable's recent dramatic claim about the level of personal indebtedness really supported by the data?


It seems that by anybody's measure the UK's household debt to income ratio is very high, both by international and UK historical standards. The OECD for example records that, as of 2009, average UK household debt was 170.7 per cent of disposable household income.

The IMF also provides the following graph illustrating the size of the UK's household debt to disposable income ratio compared to certain other economies.

To say this ratio is "high" is one thing, and to claim that it is 'higher than certain other comparable economies' is another. But Mr Cable went even further, arguing that it is the highest in the world. On the evidence seen by Full Fact, this is not the case.

The European statistics agency Eurostat has produced data that shows that, as of 2009, the UK's household debt to disposable income ratio was the fourth highest of the (European) countries that it examined. According to this data, UK household debt was 148.97 per cent of disposable income, compared to the 199.10 per cent seen in Ireland, the 241.30 per cent for the Netherlands, and the 275.10 per cent recorded in Denmark. On top of this, in 2008, it records both Norway and Switzerland (for both of whom 2009 figures are unavailable) as also having a higher debt to income ratio than the UK.

Full Fact also found more up to date (2010) IMF data showing that, while the UK's household debt to income ratio is certainly high, it is not the highest in the world. The below graph illustrates this:

Here again, we see the UK with a lower ratio than Denmark, the Netherlands, Norway and Sweden in 2010.

It appears then that Vince Cable has overstated the terms of his claim. OECD figures (found at Annex Table 58 here) show that the ratio he talks about can be said to be the highest in the G7, however Full Fact can find no evidence to support the claim that it is the highest in the world, and plenty to contradict it.

Full Fact has contacted the Lib Dem press office to see whether they can point us towards an alternative source backing up Vince Cable's claims. As yet they have not provided us with this.


Vince Cable seems to be significantly overstating his case by claiming that the UK has the highest household debt to income ratio in the world. The data that Full Fact was able to obtain on this matter all showed that we ranked behind four other European nations, before we even consider the rest of the world.

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