11th March 2016
Over eight million people in the UK are ‘over-indebted’ and struggling to stay on top of bills and credit card commitments.
One in six UK adults are struggling with their borrowing, according to a report by the Money Advice Service. It shows people renting, young people, single-parent families and those with three or more children are most likely to be over-indebted.
These people were most likely to answer ‘yes’ to the statements: you find keeping up with bills and credit commitments a heavy burden and you have fallen behind or missed payments in at least three of the last six months.
The three most over-indebted places in the UK are Sandwell in the West Midlands, where 24.7% of people were in this category, and then Blaenau Gwent and Merthyr Tydfil in South Wales at 24.3% and 24.1% respectively.
Three of the top 10 areas of over-indebtedness were in the UK; Newham, Barking and Dagenham and Tower Hamlets.
The least over-indebted area was East Renfrewshire in Scotland, with just 10% of the population over-indebted, followed by East Dorset and East Dunbartonshire – both at 10.1%.
Renting is more likely to lead to over-indebtedness, with 25% of tenants being over-indebted compared to 12% of homeowners. Tenants in social housing are even more likely to be over-indebted a 29% versus 21% renting from a private landlord.
Having children also plunges people into debt with parents 50% more likely to be in problem debt that those who do not have children. The families who have three or more children are more likely to be over-indebted.
Of single parents, 28% are over-indebted compared to 18% of two-parent families. There are 3.8 million single-parent families in the UK.
Of course, income plays a large part in over-indebtedness, with adults with an income of £10,000 or below 24% more likely to be over-indebted.
And age is also a factor and younger people, aged between 25 and 34, are four times more likely to be over-indebted than those aged over 65.
Caroline Siarkiewicz, head of debt advice at the Money Advice Service, said: ‘This research breaks new ground, providing us with the most up-to-date look at levels of problem debt across the UK.
‘We estimate that 8.2 million UK adults suffer with financial worries – with younger adults, larger families and single parents noticeably at higher risk.
We know that debt advice works but currently, only one in five people with financial difficulties seek advice. Today we are calling on everyone with problem debt or money worries, no matter how large or small, to access free advice as soon as possible.’