Midlanders hefty debt bill
Midlanders are paying more than anywhere else in the country to service their unsecured debts and are three times more likely to be out of their depth with their finances than elsewhere in the UK according to research from online credit report service MyCallcredit.
It research showed 6 per cent of Midlanders are paying more than 41 per cent of their monthly income to service unsecured debt repayments and 17.9 per cent haven't got a clue what they owe.
However, the news isn't all bad, of the people who have unsecured debts in the Midlands 65 per cent know exactly how much they owe compared to 55.8 per cent across the UK.
MyCallcredit director Alison Nicholson says:
"People in the Midlands are more likely to be paying a large proportion of their income to service their unsecured debts on a monthly basis than anywhere else in the country, and that's not a sustainable position.
Anyone who is spending more than 25 per cent of their income servicing unsecured debt repayments is considered overindebted according to the Department of Trade and Industry guidelines, so the situation in the Midlands is quite worrying.
The industry needs to continue developing more responsible lending practices, like introducing true affordability checks at the time a credit application is made, and individuals need to take stock of their overall financial position to make sure they are applying for credit responsibly."
- More than six in ten Midlanders know exactly how much they owe (65 per cent against 55.8 per cent across the UK).
- Of the Midlanders who have debts 92 per cent are comfortable with them compared to 92.7 per cent nationally.
- 2.1 per cent of the people in the Midlands said they were out of depth with their debts compared to 1.6 per cent in Scotland and 0.7 per cent nationally.
- 17.6 per cent of Midlanders haven't got a clue how much they owe in comparison to 19.9 per cent across the UK.
- 6 per cent of Midlanders are paying more than 41 per cent of their monthly income to service unsecured debts compared to a UK average of 2.8 per cent.
- 8.9 per cent of Midlanders think they will be paying more of their income to service unsecured debt repayments in a year's time compared to 6.5 per cent across the UK.
- The research was carried out for MyCallcredit by NEMS market research among 1001 adults between 18 May and 25 May 2006.