How much debt does the UK have?

In the year ending March 2024, the ONS reports that the government borrowed £121.4bn. The report showed that the government borrowed £7.3b more than the £114.1b forecast by ONS.

Overall, National debt has reached levels of £22.7 trillion which has been built up over the years.

ONS report found that the public sector spent more than it received in taxes and income in April 2024, this meant it had to borrow £20.5 billion. This was the fourth highest April borrowing since the records began in 1993.

Economists are concerned that public debt could rise even further with the ageing population meaning paying out on pensions is higher than working people paying taxes and with the potential tax cuts to come this could increase debt.


Paying back the debt

To pay back the debt the government would have to raise taxes in order to come up with the money to pay larger instalments plus interest on their debt.

Spending less on public services such as health, transport and more would also enable the government to pay off more of their debt. However this means that our taxes would be taken away from services to instead primarily pay debt which the money was borrowed for in the first place.

Jeremy Hunt, the current chancellor has stated he has a plan to reduce national debt over 5 years and Rishi Sunak has made reducing debt one of his main promises.


Why does the government borrow money?

The UK government will borrow money when taxes from working people, companies, business profits and VAT on products does not cover the year of spending. Borrowing money helps to boost the economy so that people can continue spending and so that railways, roads and other infrastructure can usually be built and improved which causes an improved economy.

The government will borrow money from the private sector and purchasers of UK gilts e.g. the bank of England. A gilt is a bond which is essentially a promise that the money will be returned with interest on top. This method leaves little risk that the money won’t be paid back.

As well as usually yearly spending, economic difficulties such as Covid or a surge in oil costs will cause the government to borrow more money. During Covid the economy needed support through borrowing as less people were spending and working people were being paid furlough by the government.


UK debt affects government spending on public sectors and affects where taxpayers money is directed.