Fears of a growing mountain of debt facing the people of Luton
Luton is one of the highest areas in southern England for average debt level.
Drawing on a dataset of nearly 300,000 insolvent UK consumers currently struggling with their personal finances, Aryza’s new UK Debt Statistics report found that Preston has the highest average personal debt level in England, at £ 19,473. Luton ranked 12th with an average debt level of £ 18,393.
The vast majority of locations in the 20 highest debt levels were found in the Midlands or the north of England. Luton and Harrow are the only places in the south of England.
The report, from financial management solutions company Aryza, states: “During a hectic six month period for many people in the UK, it is no surprise that we are seeing the average level of debt increase as individuals struggle with their personal finances.
“Uncertainty in the job market, the announcement of the end of the universal credit hike, the rise in utility bill prices, the end of the leave scheme and the end of mortgage payments and holidays have created together a “perfect storm” of conditions to put pressure on people – especially on the lowest incomes.
“It is clear from the data that the increase in debt levels is largely due to soaring household bills, and this is proving most detrimental to low-income people, where even the slightest increase in spending is enough. to push them into debt and to have financial difficulties ”.
CEO Colin Brown said: “The data in this report examines the impact of debt on the British population. They show an increase in debt in the younger age groups, which is perhaps not surprising, given that young people are more likely to have lower-paying or part-time jobs, working in sectors such as hospitality and retail.
“Those with jobs in industries that have been hit hardest by the COVID-19 pandemic – restaurant staff, bar staff, taxi drivers, retail workers and supermarket assistants – all find themselves on this list. It is also disheartening to see nurses struggling with their finance staff, having worked under the most difficult conditions imaginable throughout the pandemic.
“As people’s incomes decline – more and more people are using credit to subsidize basic expenses – ‘credit’ being listed as one of the most common reasons listed as ‘financial hardship’. One in five people struggling with their personal finances already owe utility companies money, rising gas and electricity prices during the winter months and rising fuel costs and of food should put many more people in a vulnerable position.
“With people in lower-paying, part-time jobs bearing the brunt of the debt crisis and the end of the universal credit boom costing the most financially vulnerable people over £ 1,000 a year, it there is a danger that with the increase in the cost of living. , thousands more will be forced to seek help with their own financial situation and will make Britain’s debt problem worse. “
Household and motor vehicle debt is currently causing large numbers of people to struggle with their personal finances and go into insolvency, the report says. Energy and utility bills are responsible for the debt of nearly one in five people analyzed in this report. With the UK energy price cap increasing in October 2021, it seems likely that additional financial pressure will be put on households during the winter as gas and heating spending is expected to rise.
“Debts on hire-purchase and to local authorities, in the form of unpaid housing tax, are both found in more than 10% of cases. the money they borrowed to supplement their income.