Leading UK debt resolution company, ClearDebt claim figures released earlier last week by Confused.com are actually more worrying than they look.
- Confused.com report underestimates suburbia debt
- High income groups become recession’s biggest victim
- Northerners are more sensible with their money
Confused.com states that residents in Kingston, Surrey, have raked up the highest level of UK debt, owing 169% of their annual income. Confused.com failed to note this is based on gross and not net (after tax) incomes. When working out the net equivalent, ClearDebt believe this would be much closer to 202% which is even more alarming.
When take home pay is calculated instead, the debt to income ratio rises significantly.
Andrew Smith, Marketing Director of ClearDebt explains,
“Confused.com’s valuable research highlighting the geographical and income based differences in debt and income. What their report doesn’t show is the realistic level of debt these people have, based on the money in their pockets, rather than the figure on their payslip.”
This new worrying statistic means that it is time for even higher income groups to accept they are overspending their way into unmanageable debt. IVAs and Debt Management Plans may no longer be debt solutions predominantly associated with the lower income groups, says UK debt experts, ClearDebt.
Concurring with the logic behind the Confused.com report , ClearDebt states it not only highlights people are living beyond their means, but that those living in southern suburbia could suffer the most in the current recession if they don’t face up to their debt immediately.
Shaming them with sensibility are the Northerners. Mancunians featured in the report are found to just owe an average of 51% of their salary. However, in net terms, this equates to 72% of their salary – which is a hefty increase on Confused.com’s implied spending.
Andrew Smith of ClearDebt commented that these statistics prove what ClearDebt expected would result from the recession:
“Until the credit crunch hit, those in debt were usually people in lower income groups. However, now, the biggest change is that we see income groups, who are used to spending, to keep up with the Jones’s, falling into debt because of an unplanned life change such as redundancy, bonus-shortfall or even pregnancy, which they cannot afford to bank roll without the aid of plastic.”
Smith believes that the suburban residents Confused.com is highlighting, are going to face their biggest struggle yet as they come to terms with debt. What he questions even more though, is whether they have the discipline to do something they are not currently used to or even know how – to budget.
With residents in Camberley owing an average of £2,000 each on credit cards, ClearDebt believe they should be taking example from the much stricter spenders in the North of England. Residents in Dumfries are sensibly watching their pennies and owe less than, on average, £750 each.
As the recession continues, ClearDebt warn the number of high income consumers falling into debt could substantially increase with the rise of redundancies.
Ends.
For advice on debt solutions, consumers can call ClearDebt on FREEPHONE 0800 0192 095
For further Information contact: Jacqueline Cohen on 07976 739 125, jacqueline.cohen@cleardebt.co.uk / Andrew Smith at Andrew.smith@cleardebt.co.uk
