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Urban city areas dominate new ‘debt snapshot’ of the UK PDF Print E-mail
Thursday, 21 January 2016

Financial problems have a clear geographic and social pattern in the UK. That’s the message coming from new research published today by Experian, the global information services company, and leading free debt advice provider StepChange Debt Charity. 

The research used national data to analyse and map areas across the UK with the greatest concentrations of people seeking professional advice for debt problems, and areas where financial problems are most prevalent. The charity’s data was used to identify the social and demographic make-up of those people seeking advice.

Those on low incomes, young people in rented accommodation and young families appear to be the groups that are more acutely affected by debt-related problems. Britain’s ‘aspiring homemakers’ are coming under pressure from the high costs of living and comparatively low wages.

Inner cities and their surrounding areas up and down the country feature prominently on the list of places with the most debt related problems. Parts of East London and West Birmingham as well as Manchester and Hull topped the rankings for locations where people had ‘severe financial problems’ and had fallen behind with bills and credit commitments.

The London Borough of Newham topped the rankings of places with the highest penetration of both real financial problems and the highest index of people having sought professional advice over debt.

At the other end of the spectrum, locations across the southern counties and suburban London were identified as having the lowest levels of debt problems, with the Isles of Scilly found to have the lowest levels of problem debt in the UK.

Richard Jenkings at Experian, said: “When we analysed the people that have had to seek debt advice I was struck by the fact that every single type of person is represented. Our findings show that debt problems can impact people from all different backgrounds and circumstances.

“Although it is not a surprise that the need for advice on debt-related problems rises as average income levels fall and unemployment rates rise, evidently there’s also a significant number of people who have either lived beyond their means or whose circumstances have changed and have fallen into to debt. Anyone could be in their shoes.

“What is also interesting is that when you compare the average incomes of each place in the UK with the number of people seeking debt advice in those areas, there are places, such as parts of southern Essex and the Medway towns, which have far more problems than you might expect.

“Nobody would deny that it is easier to fall into debt if you have a low income, but this study has shown that there are also variations in people’s behaviour in different parts of the country.

“Over the course of 2015 Experian provided more than 55,000 free credit reports to people seeking help from debt advice charities, via a dedicated service set up to support free debt advice. What is clear is that unmanageable debt remains a significant challenge for millions of people around the UK.”

Mike O’Connor, Chief Executive of StepChange, said: “This research gives us a crucial insight into the nature debt problems across the UK. Debt problems are most common in urban areas and certain groups within society are more acutely affected by problem debt but problem debt can afflict almost anyone and no area of the UK is unaffected.

“Consumers are borrowing to a level not seen since the pre-crisis period. Debt is an issue that the government and policy makers must take seriously. Millions of households live on a financial knife-edge where vulnerability to debt is a persistent worry.

“We need concerted action by government to ensure better protections for those who fall into debt and better mechanisms to help people build precautionary savings. By supporting people in building £1,000 in savings we could prevent 500,000 households from falling into problem debt.”

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