Despite the improving economy, the proportion of North West adults who say they are worried about debts has increased from 46% in February to 54% – with the rising cost of living the most likely cause of people’s struggles to payday, according to research from the insolvency trade body R3.
The latest survey of almost 250 adults in the region found that 51% struggle to payday, compared to 42% in February, with over half of these (55%) blaming the rising cost of living. The survey also found that 24% expected their finances to worsen in the year ahead, slightly outnumbering the 22% who expected them to improve.
Jeremy Oddie, North West regional chair of R3, who is also head of recoveries at Mitchell Charlesworth, said: “Optimism about the wider economy still isn’t entirely filtering through to people’s bank balances. The rising cost of living, credit card debts, and rent costs are all preying on the minds of North West consumers, many of whom are finding that their financial breathing room is becoming smaller and smaller. If wages can’t keep up with the rising cost of living, more and more people will feel like they’re being ‘left behind’ by growth.”
The survey also revealed that one in 14 adults (7%) are now in a debt management plan – up from 5% earlier this year, while the proportion taking out a recent payday loan has also risen, from 3% to 8%. It ties with government figures which show that individual insolvencies have begun to increase again, and consumer borrowing is on the rise for the first time in a number of years.
Jeremy Oddie added: “A few quarters of economic growth won’t make up for the impact the two-decade long consumer credit bubble has had on household finances. Savings are low and there is still a worryingly high level of household debt out there. While there is little we can do about the cost of living, there are solutions for debt problems. I would urge people who do have financial problems to make 2014 the year they get back in control of their finances.”