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More people in Wales struggling to meet the cost of living

26 March, 2015

Increasing numbers of people in Wales are falling behind on their essential household bills, a report from a leading debt advice charity reveals today.

The proportions of Welsh clients contacting the StepChange Debt Charity helpline with arrears on rent, Council Tax and water bills have all risen since 2011, with the average amount of debt owed on many of these bills higher than ever before.

The findings come as part of the charity’s ‘Wales in the Red’ report, an annual analysis of debts held by the charity’s clients in Wales, including statistics from all 22 unitary authority areas. Last year, 9,270 people in Wales called the charity’s helpline seeking advice on their debts, a rise of 23% from 2013 and almost double the amount of callers in 2011.

Mike O’Connor, chief executive of StepChange Debt Charity, said: 

“The situation facing too many households in Wales is becoming more precarious. People overall owe less on  unsecured debt such as credit like credit cards and loans but the amount they owe on life’s essentials such as water and Council Tax is growing. Falling behind on paying off debts due to borrowing is bad enough, but when people are struggling with everyday living costs, the situation for individuals and their families becomes a crisis that society cannot ignore.  

“Action must be taken to prevent more families falling into problem debt, and to help and protect those who are already unable to keep their heads above water.”

Key findings

Essential household costs

The report identifies many areas where households in Wales are struggling to make ends meet, including:

  • The proportion of Welsh clients with Council Tax debt rose to almost a third last year (up to 30.4% from 21.4% in 2011), with the average debt at £762 (up £135 from £627 in 2011).
  • The proportion of Welsh clients in water arrears has almost doubled since 2011, from 14.8% to 28.8%. The average amount owed in water arrears is £714 (up £183 from £531 in 2011). 

The proportion of Welsh clients who rent their home and have rent arrears stood at 23% in 2014, with 13 of the 22 unitary authority areas having higher than average levels of renters in arrears. There has been a large increase in the percentage of Welsh clients who live in rented accommodation – up from 29.8% in 2011 to 53.0% in 2014. 

Demand for debt advice

Over the past four years, the number of Welsh clients has risen by 84%, from 5,029 in 2011 to 9,270 in 2014. When analysed by demand per 10,000 of the population, the charity’s services were most called upon in South Wales. The five unitary authority areas where the demand was highest are:

  • Blaenau Gwent (50 clients per 10,000 population)
  • Neath Port Talbot (47)
  • Bridgend (47)
  • Caerphilly (43)
  • Newport (43)

Debt burden

Almost a third of Welsh clients were paying more than 25% of their income towards servicing their debts at the time of contacting the charity. Once they have gone through the budgeting advice process, the average Welsh client has just £10 left over each month after meeting their essential living costs to put towards their debts, showing that financial difficulty remains widespread and acute, even as average unsecured debts fell to £12,759 from £14,027 in 2013.

Payday loans

Between 2011 and 2014, the number of Welsh clients with payday loan debt grew by 11%, from 5.9% to 16.9%. However, there was a slight decline from 2013, when 18.3% of clients in Wales held payday loans. Similarly, the average payday loan debt per client fell from £1,335 in 2013 to £1,223 in 2014. This may be an indicator that we are beginning to see the new regulatory regime taking effect.

Read the Wales in the Red report.

Notes to editors

  1. The full Wales in the Red report can be viewed here. It is based on the 27,115 people who contacted the charity’s telephone helpline from Wales between 2011 and 2014.

StepChange Debt Charity news contact

Contact the StepChange news team on:

Tel: 0207 391 4598

Mobile: 07985 404 153

Email: press@stepchange.org

Follow our press team on Twitter: @StepChange

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