Welsh county named biggest debt hotspot in UK

http://www.theguardian.com/money/2014/dec/05/welsh-county-biggest-debt-hotspot-uk

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The UK’s biggest debt hotspots, where the highest concentrations of people are seeking help from Citizens Advice are Denbighshire, Merthyr Tydfil, Stoke-on-Trent, South Tyneside, Darlington and Salford, a report has found.

The charity, which has helped almost half a million people with debt over the past year, analysed calls for help with debt it received across England and Wales between July and September.

Citizens Advice has also seen evidence of changes in the reasons that people sink into levels of debt they cannot cope with.

The charity said that since the economic crisis, problems with consumer debt such as credit cards and personal loans have fallen significantly. By contrast, problems with “priority debts” such as rent arrears and council tax debts are growing.

For example, in 2007-08, around one in five debt problems reported to Citizens Advice were credit card or store card-related. That proportion has since halved to around one in 10 and has been overtaken by the share of people with debt problems who are in council tax arrears.

Despite the recovering economy, the charity is seeing increasing numbers of people tipped into problem debt by everyday living costs, rather than a particular life event such as job loss or divorce.

The charity dealt with 405 clients in Denbighshire between July and September, equating to 0.54% of the adult population there, making this area of north Wales the biggest debt hotspot.

Merthyr Tydfil in south Wales was second on the list, with 248 clients helped between July and September, equating to 0.53% of the local population.

Liverpool, Stevenage, North Tyneside, Gateshead, Middlesbrough, Stevenage, Lincoln, Barrow-in-Furness and Hastings also featured among the 20 areas with the biggest clusters of problem debt reported to Citizens Advice.

Gillian Guy, chief executive of Citizens Advice, said: “Times have changed, and so have people’s debt problems.

“Consumer debts like credit cards and personal loans have traditionally been the most common debt problems that come through our doors. But now priority debts such as council tax arrears are gradually building up as people struggle to cover everyday costs.

“In the past, people were more likely to get help for debt problems triggered by life events such as illness, redundancy or separation.

“But in recent years more people are being pushed into debt as they struggle to stretch their income to cover everyday living costs.”