Lets take an example of a man Ted. He has a duplex house, a station wagon and some cash in the bank. Now lets us look at the other side of the balance sheet of Ted.. Ted has got a home loan which has his house as the collateral for the loan. He has also mortgaged his home for another loan which was used to set up his business. Next the car loan is yet to be paid with the car being the collateral as well. Thus Ted major assets have already been mortgaged. He also some major credit card bills as well. Thus as many would say is that Ted is a classic example of what kind of debt every average British faces during their lifetimes.
Now Ted needs another loan to boot. He is already deep in debt and needs another loan to pay existing debts like credit card debts as well as installments for his home loan as well as car loan. Ted is barely able to take care of his expenses and naturally like most Britisher have a lot of debt on their heads. The people are running their homes on funds raised from debt and every time there is a salary raise or promotion the income increases. But with the income the individuals also manage to raise the amount of debt on them as well.
Living within one is means is at most a laughable thought. Living standards of people depends not on what they earn but rather how much they can borrow. This has become a very common phenomena and the only thing left to do is go for unsecured loans. These kind of loans do not require any collateral and can be acquired easily enough if one has a good credit record or history. It does not matter how much debt the person is under but if the installments are regularly paid on time and no defaults made then these loans can be acquired easily.