More than eight million live with problem debt
A report by the Money Advice Service and CACI revealed 8.3 million people (15.9%) in the UK are living with a debt problem. This is up from the 15.4% reported in 2016.
The figures show people living in Newham, East London, are estimated to have higher levels of over-indebtedness compared to anywhere else in the UK. This means they struggle to meet monthly bills or have already missed a number of bills within a six-month period.
Tower Hamlets in London takes second place (22.7%), followed by Sandwell, West Midlands (22.1%). However, according to the research, those in East Dorset (9.7%), Mole Valley, Surrey (9.9%) and Chiltern, Buckinghamshire (9.9%), are reported to have the lowest proportion of over-indebted residents in the UK.
Regionally, the top two over-indebted regions in the UK are the North East (17.7%) and Wales (17.7%), followed closely by London (17.2%) and the North West (16.9%).
Sheila Wheeler, director of debt at the Money Advice Service, said: “This research tells us that one in six people in the UK have financial worries, a figure that stands at over 8.3 million. Debt is a complex challenge and one that needs a collaborative approach if we are to successfully address it.”
The research comes as the boss of the city regulator, the Financial Conduct Authority, said the government needs to step in to tackle the ongoing surge in credit amount the most vulnerable.
In an exclusive interview with The Guardian, Andrew Bailey said he had concerns about the sheer numbers borrowing to make ends meet, particularly gig economy workers without guaranteed hours who needed credit to fill income gaps.
Bailey said: “I don’t think we have a sustainable solution, in terms of the provision of credit where needed. No one body might solve it on their own.”
The FCA boss has placed the issue of consumer credit at the centre of the watchdog’s agenda this year as figures reveal consumer credit, which covers personal loans, credit cards and borrowing for cars, is rising at just under 10% a year at a time when wages are falling at 0.4% a year, taking inflation into account.