UK's outstanding debt overtakes annual salary earning

As the recession continues, new figures from Confused.com highlight the levels of debt British homes are exposed to, as people owe more than they earn in a year.

Research from the comparison website identifies which region claims the dubious title of ‘debt dependents' where residents owe significantly more than they bring home.

On average, for every £1.00 earned in each year's salary, a person will owe £1.02 in debts

Residents in Kingston-Upon-Thames are exposed to significant lending risk as they owe 169% of their annual income

People from Manchester owe 51% in debts of every pound earned in their annual salary

Surrey spenders are plastic fantastic with over £2,000 outstanding on flexible friends

I.O.U's

Today's study from Confused.com identifies the nation's debt demons in the midst of the worst recession since World War Two. The study provides a snapshot of average debt per person, compared with the average salary and goes on to identify which areas (out of the 137 investigated) owe more than they are earning in a year. Figures also highlight the average outstanding balances on credit cards, mortgages, loans and hire purchases from area to area.

Residents of the leafy and affluent suburb of Kingston-Upon-Thames are the Nation's most indebted with the average owing 169% of their yearly earnings. In comparison, frugal Mancunian's do a far better job in money management, with the average owing 51% of their annual salary as outstanding debt.

Plastic Fantastic

The UK's lending responsibilities (including credit card and mortgages) differ from one area to the other. Residents in Surrey's Camberley are the most happy in spending on the plastic with the average person owing £2,000+ on their flexible friend. Spenders in Dumfries however take a far more sensible approach to plastic fantastic with the average person having less than £750 outstanding on a credit card.

As credit becomes less readily available, residents of Chester-le-street are left with debts from previous credit, owing a whopping £3,340 for hire purchases and loans.

Gemma Stanbury, head of savings, loans and debt at Confused.com said: ‘This study provides a significant insight into the lending responsibilities and borrowing commitments of people in the UK. As we face continued uncertainty and increased financial pressures, it is good advice for all to become more aware of what they are spending and on what. Where spend and debt can be reduced, efforts should be made to ensure it is done.'

Switch and Save

Switching could literally save you hundreds of pounds. Typical ‘revert to' rates on credit cards are around 16%, meaning that a typical resident from Camberley could be paying over £320in interest alone every year. By simply switching to a 0% balance transfer card you could pay no interest, giving you the chance to repay some or all of your outstanding debt.

Stanbury continued: ‘If debt problems are spiralling, debt management programmes are available which will allow consolidation of your debts, requiring a fixed monthly payment. Confused.com's dedicated debt management service can liaise with your creditors and come to an arrangement that is agreed by both parties, and gets you on track to get out of debt.'