Debt is still major worry for North Easterners

New research into the personal finances of people across the region has found that, despite an improving wider economic picture, more than half are worried about the amount of money they owe.

The latest findings of insolvency trade body R3’s regular Personal Debt Snapshot show that 55% of those surveyed in the North East, Yorkshire and Humberside are concerned about how much they owed, a figure that has risen by 11% since Autumn last year and which is four per cent ahead of the UK national average.

Credit card repayments remain the main cause of concern, with 58% of those with debt concerns citing them as a worry, while bank overdrafts (22%), mortgages payments (18%) and bank loans (15%) are also widely referenced in the research.

Almost half (49%) of regional respondents to the R3 survey said they sometimes or often struggle to make their money last until payday, with the rising cost of food (60%), household energy bills (49%) and fuel/transport costs (36%) being the main reasons for this trend.

Allan Kelly, who is chair of R3 in the North East and head of the Turnaround & Insolvency team with regional accountancy firm Tait Walker, says: “Inflation may be falling and the wider economic picture may be improving, but the cost of living is clearly still too high for many.

“Our Personal Debt Snapshot series regularly finds a high proportion of adults in the region struggling to make it from one payday to the next, with food and energy bills topping the list of reasons for financial difficulty, and it’s a trend that shows little sign of slowing.”

The latest round of the PDS also found that almost a third (32%) of adults across the region don’t any savings to fall back on, though in terms of future financial prospects, the number of people who think their financial situation will improve over the next six months (24%) is roughly the same as the proportion who think they’ll worsen (23%) in that time.

Family members (38%) are the most likely first port of call for advice about debt worries for people in the region, followed by debt charities and voluntary organisations (26%), financial advisers (15%) and friends (12%).

Across the UK as a whole, half (51%) of adults said they are worried about their current level of debts, which is the highest proportion to say they feel this way since September 2012.

Allan Kelly added: “The recession clearly had a massive and long-lasting impact on the region’s personal finances, and while the economy is growing again, it remains below the size it was before the downturn struck, so it may be some time before we catch up with where we were then.

“With the cost of the basics in life continuing to rise, and wage increases often negligible, if being awarded at all, there’s a very difficult situation to manage for a high proportion of people who might want to do something about the amount of money they owe, but who find they’re not in any position to properly do so.

“Keeping a close watch on your finances, putting something by whenever you can and getting professional advice on how to start putting things right if you feel your debt levels are getting out of control remains the best course of action for anyone looking to sensibly manage their money in difficult circumstances.”

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