Lowest debt burden if you live in Wales
People in Wales have the lowest unsecured debt levels in Britain, although they still have the same relative levels of IVAs and bankruptcy to the rest of the UK, says Insolvency Company IVAOnline.co.uk.
New figures from the Office for National Statistics (ONS) show that between 2008 and 2010, Welsh households had the second lowest percentage of households with liabilities and overall owed less money – around £2,000. In comparison, the South East of England had the highest financial liabilities of around £4,200 per household, while the highest percentage of households with at least one type of financial liability could be found in London.
However, while the debt burden of Welsh households is less, they still have the same likelihood of taking out an IVA or declaring bankruptcy due to lower income levels.
Edward Ware, from StepChange Debt Charity (formally the Consumer Credit Counselling Service), said: “In terms of Wales having the lowest debt, it’s likely to be to do with income levels. It’s often the case that areas where people have higher incomes, the level of debt tends to be higher because they can access higher levels of credit. When you get into trouble, you inevitably do at a higher level (of debt).” The full article can be read here.
This is also the view of other front line services that deal with debt cases every day. Ashley Comley, specialist services manager at Rhondda Taf Citizens Advice Bureau, said: “We tend to find that our usual debt is less than £10,000 per client. That will be a mix of priority and non-priority debt – priority is mortgage, rent, council tax, electricity; the non-priority is credit cards, loans.
“Income levels are quite low in Wales compared to the rest of the UK. The relative burden can be quite high – someone loses their job or their relationship breaks down, hours are cut or some danger point happens. Some people have debts that they can manage, it could be hundreds of thousands of pounds, some people can have a couple of hundreds of pounds worth of debt (and they can’t cope)."
“It’s relative; it completely depends on the situation.”
The causes of this could be explained in part by the ONS figures that show the biggest debt burden is experienced in households where the ‘head’ was 25-34 years old, suggesting that age-related financial commitments could be at the root of the debt burden.
A spokesperson from Insolvency Company IVAOnline.co.uk, said: “There’s the misconception that debt is due to someone going out and having a good spend on their credit cards, and buying luxury goods they can’t afford. A closer look at the figures actually suggests that age-related commitments are more likely to be the cause. People between the ages of 25-34 are to likely to get married, buy a house, have children and incur costs associated with their upbringing, all generally expensive undertakings crammed into a relatively short period of their lives."
“With salary freezes, high unemployment and high cost of living associated with the economic crisis, it’s not hard to imagine that those with young families on the property ladder are juggling large complex financial commitments that bring them close to the financial edge frequently.”
“All it takes is a drop in income to tip them over the edge.”
IVAonline.co.uk provides help and advice on all aspects Individual Voluntary Arrangements. An IVA will allow you to legally write off up to 60% of your debt over a period of 60 months, leaving you completely debt free.