Member Article

Third of North East ‘concerned about debt’

More than a third of individuals in the North East are concerned about the amount of money they owe, but few have sought advice on how to manage their debt.

After surveying more than 2,000 people across the UK as part of it;s Personal debt Snapshot, R3 found that 1 in 4 people in the region are concerned about debt, broadly in line with the national average.

Despite this however, only 5% of North East respondents have asked for advice on how to address their financial situation, and a mere 3% were planning to do so in the next 6 months.

Steve Ross, chair of R3 in the north east and a director in the Corporate Recovery department of the Sunderland office of accountancy firm RSM Tenon, says: “This snapshot uncovers a real unwillingness to take debt advice, when the most sensible thing that anyone facing financial difficulties can do is take steps to address them.

“If the situation was turned on its head, and someone had a sum of money to invest, they clearly wouldn’t think twice about taking advice first, and R3’s members in the north east know that the experience of those who seek proper advice is invariably positive.

Almost 60% of people in the region were concerned about credit card debt, while other debt worries including repaying loans made by family or friends, paying off store cards and bank loans and keeping up with an overdraft.

12% of people in the North East said they were likely to seek a short-term payday loan in the foreseeable future, with the same number saying they often struggled for money from one payday to the next.

A higher proportion said they felt their financial situation would worsen in the next six months than thought it would improve, with the latter group being some way below the national average of 27%.

Almost a quarter of people reported that they didn’t have savings, and worryingly, around one in every 13 survey respondents said they were in a formal Debt Management Plan – the second highest proportion of people in any part of the UK to say that they were.

Steve continued: “The high proportion of people in the north east in Debt Management Plans is a real issue, and my concern is that, with many people being clearly unwilling to take debt advice for whatever reason, they are far more likely to be pushed into a ‘product’ by those with a vested interest.

“Across the UK, over a third of those who did take debt advice were not aware of the range of options they had beforehand, and I would recommend that anyone in this situation takes a deep breath before choosing a debt solution and makes sure you know what all the options are.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .