Concern over debt has reached record levels in Great Britain with people in the North West amongst the worst affected, according to a survey by insolvency trade body R3.
R3’s latest Personal Debt Snapshot shows that two out of three people in the region (65%) are now worried about the amount they owe – up from 40% a year ago. It reveals that the North West is one of the worst regions in the country for debt worries, beaten only by the North East and London.
According to the survey, over half of the North West’s population (54%) now struggle to make it to ‘payday’, a rise of 12 percentage points on last year. It also reveals the presence of a new breed of ‘zombie debtors’ who are paying off the interest on their loans without repaying the capital – and shows that large numbers of people are now considering taking out a payday loan.
Jeremy Oddie, North West regional chair of R3 and a head of recoveries at Mitchell Charlesworth, said: “Recent figures show consumer lending has been on the rise as people continue to borrow money. With rising inflation and continuing job losses, it’s not surprising that debt worries are now at record levels.
“Many people are only paying the interest on their debt rather than paying off the debt itself, but they cannot carry ‘hanging on’ in this way forever. They will have very few options should interest rates rise or their circumstances change.
“Debt worries can be very distressing. People who do feel their debts are out of control need to find a longer-term solution and should seek independent financial advice from a regulated insolvency pracitioner or Citizens Advice Bureau .”
R3’s research reveals, through GB as a whole, 3.5 million adults are considering taking out a payday loan over the next six months. Jeremy Oddie adds: “Payday loans are not the best way to resolve debt struggles. We know that many who take them out find them to be a negative experience, often escalating financial troubles.”