Northern Ireland debt levels worryingly higher than UK average

People in Northern Ireland are struggling with heavier financial burdens than people in the rest of the UK, according to new figures released by StepChange Debt Charity. In the first six months of 2014, the charity helped 1,981 people in Northern Ireland, who were facing average unsecured debt levels of £18,360. The average debt across the UK in the same time period was £15,267, and so the average debt in Northern Ireland is 20% higher.

The new report, Debt in Northern Ireland, highlights some key areas for concern in the region:

Payday loans

Payday loans are a growing problem. Of the clients in Northern Ireland who contacted the charity in the first half of 2014, 23 percent had payday loan debt – up from just 4 percent in 2010 – a more than sevenfold increase.

Those with payday loan debt owed an average of £1,689. This exceeds the clients’ average monthly income of £1,440, which could suggest that lenders may not be carrying out sufficient affordability checks before approving loans.

The danger is that people are not able to repay their debt and may become trapped in an ever increasing spiral of debt.

Mortgage arrears

From 2009 to 2013, the charity saw a 57 percent increase in the number of people seeking help with mortgage arrears in Northern Ireland. In the first half of 2014, the average amount owed by clients on mortgage arrears was £3,249 – an increase of £974 from 2013.

It is highly likely that interest rates will rise next year and those who are already struggling to meet their housing costs could find themselves in deeper financial difficulty.

Self-employed

Self-employed clients in Northern Ireland are £279 per month worse off than those in traditional full-time employment. The average debt level of self-employed clients is £36,271, and they are £169 short of what they need to cover their essential bills each month.

In response to the findings, StepChange Debt Charity chief executive Mike O’Connor said:

“Today’s figures are a stark reminder of the tough financial landscape many people in Northern Ireland face on a daily basis. Far from feeling the benefits of economic recovery, many people in Northern Ireland struggle to meet even the basic cost of living, and are increasingly turning to payday loans and other high-cost credit in an attempt to bridge the gap. What looks like a lifeline can become a debt trap for people and their families.

“Anyone who feels their financial situation is spiralling out of control should seek free, impartial debt advice immediately.”

Anyone in the region struggling with debt can seek free advice from the StepChange Debt Charity helpline, run in conjunction with the Limavady Community Development Initiative, on 0800 138 1111, or use the charity’s online tool Debt Remedy at www.stepchange.org/debtremedy