Debt is a problem that’s plaguing the whole of the UK. In fact, household debt across the country has increased by 7% in the last five years alone. New figures suggest that half of British adults could be financially vulnerable. Not all areas of the UK are equal in their debt problems, however. Whilst the problems which are causing debt rises in the UK are largely the same, some parts of the country fare worse than others in terms of how many people are in debt there. Read on to find out more about Britain’s debt hotspots and why the people who live in them are falling into financial difficulties.
Topping the list of debt hotspots in Britain is Newham in London. For a borough with a population of 308,000, Newham has some 60,000 people in debt. This shocking statistic is borne of a variety of reasons, one of which being the startlingly low average household income of just £15,704. This is a far cry from the national average of £22,204 and, when coupled with the higher cost of living in London, has resulted in many of Newham’s residents turning to credit cards simply to get by.
Lenders seem to have forgotten the causes of the recession in this respect; it was through careless lending by banks to people who had little chance of paying back what they owed that the global financial crash of 2008 occurred.
Another factor which accounts for the high level of debtors in Newham is the low employment rate; only 68.7% of people in Newham have a job, as opposed to the London average of 73.8%. Again, this points to the reasons that so many are looking to use credit cards and loans to alleviate their debt troubles, but it only adds to the vicious circle of debt that so many of Newham’s inhabitants find themselves in.
Another one of the UK’s debt hotspots can be found north of Newham in Stoke-on-Trent. Consumer lending in Stoke ballooned by 10% in 2016, a sign of the times that lenders may indeed be becoming trigger-happy in agreeing to loans once more. The Stoke Citizens Advice bureau points to the fact that, similarly to Newham, people are borrowing to pay day-to-day bills for things such as rent or council tax. Stoke has one of the highest insolvency rates in Britain too; 43 people in every 10,000 are insolvent in the city, proving once again that a high cost of living is fuelling the need to borrow unsustainably, with this phenomenon being facilitated by careless lending on behalf of banks.
Bell & Company are debt strategists who negotiate on your behalf. If you are going insolvent or experiencing severe debt issues, in particular mortgage debt or commercial loans, call us today.