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Arrow Global


3.8 million UK households to default on personal debt by 2022 reveals Arrow Global
Published on 15/08/2018

• Latest Arrow Global forecast reveals the number of households in personal debt default is set to rise over 
  the next five years - up from 3.3 million at end of 2017
• An additional 250,000 households will be in default by 2021 if bank base rate increases above Office for 
  Budget Responsibility (OBR) predictions by 0.5%
• Mortgage possessions will rise more sharply from 2020
• Findings from Arrow Global’s ‘Debt Britain 2018’ research

The number of households in personal debt default is set to increase to 3.8 million by the end of 2022, up from 3.3 million at the end of 2017 according to the latest econometric forecast from Arrow Global’s ‘Debt Britain 2018’ research.

Arrow Global’s forecast is based upon analysis of the Office of Budget Responsibility (OBR) projections for interest rates, unemployment and consumer debt.

The 0.5 million increase is expected despite a slight dip in the total in 2019 and 2020, due to the lagged effect of the post-Brexit referendum bank base-rate cut and subdued unemployment. It will then resume an upwards trajectory to reach 3.8 million by the end of 2022.

From 2020 onwards Arrow Global expects mortgage possessions to rise more sharply as the recent base-rate increase and future rises push up borrowers’ costs.

The forecast also looks at the impact on default levels if the Bank of England increases the bank base rate at a faster rate than currently projected. If it is 0.5% higher than the OBR forecast, an additional 250,000 households will default by 2021.

Figure 1: Impact of bank rate rises on defaults

Loans in default prediction

Lee Rochford, Group Chief Executive Officer of Arrow Global comments:

“While some debt default is to be expected due to changes in personal circumstances and economic factors, it is startling that an increase in the bank base rate by only 0.5% could lead quarter of a million more households to default.

“It is vital that people with debt problems are provided with support and as a responsible credit management services provider, we focus on helping people manage and repay their debt in a sustainable way.”


For further information:

Arrow Global                                                   +44 (0)161 242 5896
Paul Fitzjohn

Instinctif Partners                                             +44 (0)20 7457 2804
Rachel Cashmore

About Arrow Global

Established in 2005, Arrow Global specialises in the purchase, collection and servicing of non-performing and non-core assets. We identify, acquire and manage secured and unsecured loan and real estate portfolios from financial institutions, such as banks and credit card companies, as well as retail chains, student loans, motor credit, telecommunication firms and utility companies.

We play an active role in helping financial institutions reduce their balance sheets and recapitalise in order to increase mainstream lending. By purchasing and managing non-performing loans and other non-core assets, we provide valuable capital and expertise to a growing European market.

We are a regulated business in all of our European markets, managing over £47.4 billion AUM across six geographies with over 1,700 employees and approximately 10 million customer accounts.

In 2017, we helped over 750,000 customers to start clearing their debts in a manageable and timely manner.

Notes to editors

Debt Britain: The Arrow Global Guide to Consumer Debt, was first published in 2016 and included for the first time, forecasts for debt defaults, mortgage possessions and personal insolvencies in the UK.  These forecasts were updated in Autumn 2016 and following the latest forecast update from the Office for Budget Responsibility (OBR) published in March 2018, has again been refreshed with projections for defaults, mortgage possessions and personal insolvencies for 2018 onwards.

The Arrow Global forecast for consumer debt defaults is based on an econometric model which uses two explanatory variables: bank rate and unemployment. The model measures the past relationship between these explanatory variables and the dependent variable (mortgage defaults) using data going back to 1982.

The research was undertaken for Arrow Global by Rob Thomas, Director of Research at Instinctif Partners and formerly a Bank of England economist, high profile analyst at the investment bank UBS and senior policy adviser to the Council of Mortgage Lenders (CML). Rob was also the project originator and manager at the European Mortgage Finance Agency project and created the blueprint for the Government’s NewBuy mortgage scheme.




Arrow Global Limited is registered in England and Wales with company number 05606545. Its registered office is at Belvedere, 12 Booth Street, Manchester M2 4AW. Arrow Global Limited ("AGL") is authorised and regulated by the Financial Conduct Authority for certain credit-related regulated activities, and is part of the Arrow Global Group. AGL is registered on the Financial Services Register under registration number 718754.