Scotland’s unsecured debt levels down in 2014

January 16, 2015

The average level of unsecured debt among Scottish borrowers fell considerably over the course of last year, a recently published report has suggested.

According to the charity StepChange, the typical Scot with problem debts was £1,580 further in the red in 2013 than was the case last year.

The figures suggest that the average unsecured debt level for people with financial difficulties in Scotland as of June 2014 was around £12,359, as compared with £13,939 in the same month of the previous year.

Additionally, StepChange’s report, entitled Scotland in the Red, revealed an increase around the country in the average income level of people contacting the charity for advice in dealing with their unsecured debts.

The figures point to a £125 income increase year-on-year among indebted Scots between June 2013 and June 2014. Plus, the average Scot with problem debt was found to have an income worth roughly £162 above the level recorded as typical for the UK as a whole.

Other interesting findings from the charity’s report underlined the issues that thousands of Scots are having in dealing with payday loan debts and council taxes. According to the data, people in Scotland with problem debts have an extra £129 in arrears owed to payday loan companies compared with the UK-wide average.

Meanwhile, around 37 per cent of all StepChange clients in Scotland were struggling to cover outstanding council tax debts in 2014, with the average amounts owed to councils north of the border almost twice that of the average across the UK as a whole.

Credit card and overdraft debts remain the most sizeable for Scottish consumers who are struggling to find their way back into the black, with these two categories accounting for close to half of all unsecured debt around the country.

In their report, StepChange’s experts express concern that while the total levels of unsecured debt in Scotland appear to be falling, the debt problems that Scots face are increasingly related to essential payments and what are generally considered priority debts.

“There is some good news around debt in Scotland – the average net income of our clients has increased slightly and unsecured debts are falling. Unfortunately, though, the make-up of that debt is changing,” authors of the report wrote.

“More and more clients are in debt because they are falling behind on essential living costs. So while the amount of debt is smaller, it remains widespread and is increasingly difficult to resolve as it becomes woven into day-to-day living for many people in Scotland.”

A separate report released recently by StepChange claimed that savings worth £1,000 would be enough to save as many as half a million households around the UK from falling into problem debt.  The charity has called on the UK government to address the issue by finding new ways to encourage saving among British families living on low incomes.





John Baird

Insolvency Adviser

Tel: 0800 063 9250

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