Listen: Debt levels 20 per cent higher than rest of UK

Research by a UK charity who operate in Limavady shows that people here are struggling with 20 per cent higher debts than the rest of the UK.
Stormont budgetStormont budget
Stormont budget

StepChange, a nationwide debt advice service who work in partnership with the LCDI in Limavady, said its clients owed an average of around £18,400 on credit cards and unsecured loans. The UK average is £15,300.

Mike O’Connor, Chief Executive of StepChange Debt Charity, told the Sentinel: “The economy in Northern Ireland is not doing terribly well. There is growth at the UK level - that doesn’t appear to be felt in the wage packets of ordinary people in Northern Ireland and for many people their income has been flat and In real terms, possibly falling.”

Hide Ad
Hide Ad

The new report, Debt in Northern Ireland, highlights payday loans as 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 four per cent 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 loans and may become trapped in an ever increasing spiral of debt.

Stormont budgetStormont budget
Stormont budget

It also points to mortgage arrears as an area of concern. 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.

It also notes that 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.

Chief Executive Mike O’Connor said: “StepChange Debt Charity is the largest debt advice charity in the UK. We help people who are struggling with problem debts. We have 1,200 staff who provide advice on the telephone and online to help people deal with their debts. Here in Northern Ireland, we have a partnership with the Limavady Community Development Initiative to provide services to the people of Northern Ireland.

Hide Ad
Hide Ad

“The economy in Northern Ireland is not doing terribly well. There is growth at the UK level - that doesn’t appear to be felt in the wage packets of ordinary people in Northern Ireland and for many people their income has been flat and In real terms, possibly falling. The dependence upon on the public sector has been quite a challenge because wage levels have been kept down yet the essential costs of living - the energy costs, the rates, transport - all those costs that you can’t avoid, keep going up.

“So people are being squeezed and they are tending to reach out for a lifeline and borrowing money - sometimes from payday loan companies which can actually make the situation worse. We’re seeing an average debt, of the people who come to us in Northern Ireland of £18,500, excluding mortgages. In the rest of the UK it’s £15,500.

“My advice to somebody who has got a debt is: ‘the earlier you take action the easier it is to solve’. Typically the people who come to us wait about a year before they come to us and in that period they dig themselves deeper into a hole. We can help, so the good news is there is help out there. We are helping hundreds of thousands of people every year to reach an arrangement with their creditors for a repayment plan which is affordable. We can sometimes persuade the banks and the credit card companies to stop charging interest if you enter into a repayment plan. So, yes, people are struggling and I don’t think it is going to get any better next year when interest rates go up but the good news is there is help available - online and on telephone at StepChange.“