Shock of families’ £11,000 credit card bills

Families and individuals across Yorkshire are still drowning in debt despite the economy showing signs of recovery according to a charity as calls were made for more to be done to tackle the problem.

Picture: PA Wire
Picture: PA Wire

UK consumers remain among the most indebted in the world and figures obtained by the Yorkshire Post from the debt charity StepChange show during 2014 the average person in touch with the organisation in the region owed £11,029 on credit cards, loans and other unsecured debts.

It wants to see people become more focused on building up savings after its research has shown 13 million people in the UK lack the funds to keep up with essential bills for just one month if their income dropped by a quarter.

A spokeswoman for StepChange said: “For many households, the rising economic tide has not translated into an increase in their day-to-day budgets, and millions are still drowning in debt as we struggle to deal with the legacy of years of stagnant wages and rising living costs.

“The next Government needs to make tackling problem debt a major priority, doing more to help people build up precautionary savings and be more resilient against debt, whilst providing better alternatives to high-cost credit such as payday loans for low-income households and ensuring better protections for those who do fall into difficulty.”

The latest figures also reveal that in Yorkshire those seen by the charity in 2014 that owned the most in unsecured debt were those aged 60 and over with average debts of £13,834; those aged between 40-59 owed on average £13,563, while those aged 25-39 owed on average £9,803 and under-25s owed £3,763 in unsecured debt.

Experts say there are a number of reasons why the over-60s are struggling with debt including helping out younger members of their families financially and low interest rates which mean many are receiving less income from their savings than expected.

Mike O’Connor, chief executive of StepChange said: “Very few people won’t have experienced, or known somebody who has experienced, financial uncertainty over the last few years.”

He said it is estimated there are three million people in Britain facing “severe problem debt” and eighteen million people who are worried about making their income last until payday. He added the “cost to the state and society are devastating” with the issue leading to huge bills for mental health services and the costs of a breakdown in relationships as people struggle to cope with the impact of debt.

StepChange says half a million households could be prevented from falling into problem debt if they had just £1,000 in savings. The charity says growing numbers are seeking advice with 577,677 getting in touch in 2014 - a rise of 56 per cent since 2012.

A recent Age UK survey found one of the biggest worries of those aged over-65 was paying for energy to heat their home, closely followed by the general cost of living.