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.
Your personal credit score plays an important part in securing new loans and credit, and can affect your financial life for better or worse. Lenders use the information in your credit file to determine whether you present a high risk of default, and if your credit score is low, you may find it difficult to […]
Credit unions offer a range of financial products including current accounts, savings accounts, and loans, and can be a good alternative to banks and building societies whilst also helping your cash flow. There are credit unions all around the UK, almost 100 of them operating in Scotland. They’re not always widely advertised, however, and although […]
It’s a worrying situation when you realise your outgoings exceed your income, and it can be difficult to prevent debt in this situation, but there are solid steps you can take to get back on track – you just need to act quickly. Increasing your income or reducing the money going out are essentially what […]
If you’ve lost your job, state benefits and tax credits can provide vital financial support to see you through this tough time and help you avoid taking on too much debt while you look for more work. As far as your old employment is concerned, it’s important that you check your final wage slip to […]
If you are a Scottish resident in financial difficulty, you may have entered into a Trust Deed in order to restructure debt repayments to creditors. A Trust Deed is a fixed voluntary agreement made between the debtor and creditor, with the help of a trustee. Debt is broken down into smaller, affordable instalments, typically lasting […]
A Debt Arrangement Scheme (DAS) is a government backed scheme which allows you to repay debt through contractual, monthly instalments without the threat of legal action and incurring penalties or interest. The scheme was established in 2004 for Scottish residents in debt, providing an alternative solution to sequestration, the Scottish equivalent of bankruptcy. A Debt […]