Where are the biggest problem debts in the UK?

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There was a time when we all talked about credit: the great purchases on our credit cards, the holiday we'd pay for next year, the brilliant 0% deal we'd managed to snaffle. But the credit crunch took the wind out of our sails and now we are far more likely to be talking about debt. The debt that is soaking up our income in interest payments, the debts we can't imagine ever paying off, and the debt that's keeping us awake at night. Of course credit and debt are the same thing - but they certainly don't feel that way.

Problem debts are building up all over the UK, but where is the problem worst, and what can we do about it?


Debt hotspots
Research by the debt charity Consumer Credit Counselling Service (CCCS) used demand for its debt advice, the distribution of insolvency recommendations and levels of disposable income among people who sought its help to pinpoint the UK's problem debt hotspots.


The two areas that stood out were London and Northern Ireland. London had the highest levels of demand for debt advice per population, and the second highest level of bankruptcy. It also had the highest number of debt relief order (DRO) recommendations (bearing in mind that this option isn't currently available in Northern Ireland).

It's safe to say that London also has the biggest population of wealthy and less wealthy living cheek by jowl, so there's a question of whether this is entirely a matter of London life being too expensive, or a case of massively rising expectations that could never keep pace with reality.

Northern Ireland, meanwhile, had the highest levels of bankruptcy and individual voluntary arrangement (IVA) recommendations. And London and Northern Ireland were the only two regions were CCCS clients, on average, didn't have enough income to cover their living expenses.

Most in need of debt advice
Other areas with a massive demand for debt advice include Yorkshire, where 23.6 people in every 10,000 sought help, the North East and West Midlands with 23 people and the North West where 22.9 did.

Insolvency recommendations
After Northern Ireland and London, other areas with bankruptcy issues are: the South East, where 11.5% of clients are recommended to take this route and East Anglia and the South West where 11.3% are.

Disposable income
When looking at disposable income, CCCS clients from Northern Ireland had the least, with a monthly income £55 less than they needed to cover the cost of their living expenses. CCCS clients from London also had a monthly income £28 less than the amount they needed to live on. The next three areas with the smallest disposable incomes were the West Midlands with £29 a month, East Anglia at £28 a month and the South East at £21.

What can you do about it?
If you are struggling with debt, the first step is to face up to it. Look at all your statements and demands, and own up to those who are closest to you that you have a problem.Your next step will depend on just how serious the problem is. For smaller or more manageable debts, revisit your budget, look at where you can make savings, move your debt to pay as little interest as possible, and make a foolproof plan for paying it back. If things have got more out of hand than that, then you're going to need debt advice. You could do a lot worse than the CCCS for this help, or try the options we blogged about recently.

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