
Households with unsecured debts (like credit cards and loans) spend an average of £216 a month to repay them according to new research by Hargreaves Lansdown Savings & Resilience Barometer.
The research showed that in debt hotspots, almost 20% of income is being spent on repaying unsecured debts. Excluding student loans and mortgages, borrowers owe an average of £2,687, but in the most debt-laden area of the country, this rises to over £5,535.
It was also found that the more people earn, the more they owe, with households of the top fifth of earners, owing an average of £4,860.
Sarah Coles, Head of Personal Finance at Hargreaves Lansdown said “Debt piles have been mounting, and at this time of year we feel the pressure most. The extra cost of Christmas has added to the hundreds of billions of pounds we owe the bank, and repayments are taking a horrible toll on our finances. It’s no wonder that January felt about 11 weeks long.
“These debts aren’t held equally. Partly because it’s easier to borrow when you’re on a higher income, and partly because those on higher incomes are more confident they can afford repayments, the Barometer shows that the more people earn, the more they borrow. Those on lower incomes will tend to fall behind on bills rather than running up major consumer credit debts.
“It’s why the debt hotspots, with the most monumental piles of debts, include richer areas in London – like the City of London, Wandsworth, and Hammersmith and Fulham. Only two areas in the top 10 are outside the capital. It’s also why those with the smallest consumer credit debts are in Wales, including Merthyr Tydfil and Blaenau Gwent, where for many, money is tighter.
“For a clearer picture of those areas where debts are more of a strain, we can look at the percentage of people’s income which goes on debt repayments. This reveals some debt hotspots. There are several within commuting distance of London, including Rochford in Essex and Bromley in Kent. Here, pay is higher than the national average, but outgoings are also high in the commuter belt, and as a result, consumer debt repayments make up an eye-watering 18% of household income in Rochford and 17% in Bromley. The further reaches of the commuter belt, including areas like Fareham and South Bedfordshire, face the same kinds of pressures, with the cost of an even longer commute to factor in.
“Earning more doesn’t make your finances bulletproof. In fact, running a household with higher income, spending and debt, actually makes you less resilient if your circumstances change.”
Debt hotspots: areas with the highest debt repayments as a percentage of income
Local Authority Borough | Region | Debt repayments as % of income | |
1 | Rochford | East | 18% |
2 | Broadland | East | 17% |
3 | Castle Point | East | 17% |
4 | Central Bedfordshire | East | 17% |
5 | Bexley | London | 17% |
6 | Havering | London | 17% |
7 | Bromley | London | 17% |
8 | Sutton | London | 17% |
9 | South Norfolk | East | 17% |
10 | Blaby | East Midlands | 17% |
11 | Tewkesbury | South West | 17% |
12 | Mid Suffolk | East | 17% |
13 | Maldon | East | 17% |
14 | South Gloucestershire | South West | 17% |
15 | Huntingdonshire | East | 17% |
16 | Stroud | South West | 17% |
17 | Pendle | North West | 16% |
18 | South Derbyshire | East Midlands | 16% |
19 | Kingston Upon Thames | London | 16% |
20 | Fareham | South East | 16% |
Debt notspots: areas with the lowest debt repayments as a percentage of income
Local Authority Borough | Region | Debt repayments as % of income | |
1 | Newcastle Upon Tyne | North East | 10% |
2 | Pembrokeshire | Wales | 10% |
3 | Cardiff | Wales | 10% |
4 | Ceredigion | Wales | 10% |
5 | Powys | Wales | 10% |
6 | Torfaen | Wales | 11% |
7 | Wrexham | Wales | 11% |
8 | Gwynedd | Wales | 11% |
9 | Isle Of Anglesey | Wales | 11% |
10 | Monmouthshire | Wales | 11% |
11 | Swansea | Wales | 11% |
12 | Denbighshire | Wales | 11% |
13 | Conwy | Wales | 11% |
14 | Blaenau Gwent | Wales | 11% |
15 | Newport | Wales | 11% |
16 | Kingston Upon Hull, City Of | Yorkshire and The Humber | 11% |
17 | Hambleton | Yorkshire and The Humber | 11% |
18 | Middlesbrough | North East | 11% |
19 | Merthyr Tydfil | Wales | 11% |
20 | Scarborough | Yorkshire and The Humber | 11% |
Areas with the smallest debts
Local Authority Borough | Region | Average unsecured debt (among those who have debts) | |
1 | Merthyr Tydfil | Wales | £1,783 |
2 | Blaenau Gwent | Wales | £1,783 |
3 | Swansea | Wales | £1,863 |
4 | Rhondda Cynon Taf | Wales | £1,863 |
5 | Neath Port Talbot | Wales | £1,863 |
6 | Caerphilly | Wales | £1,863 |
7 | Torfaen | Wales | £1,874 |
8 | Newport | Wales | £1,881 |
9 | Newcastle Upon Tyne | North East | £1,891 |
10 | Gwynedd | Wales | £1,893 |
11 | Wrexham | Wales | £1,893 |
12 | Cardiff | Wales | £1,893 |
13 | Middlesbrough | North East | £1,918 |
14 | Kingston Upon Hull, City Of | Yorkshire and The Humber | £1,930 |
15 | Bridgend | Wales | £1,939 |
16 | Flintshire | Wales | £1,943 |
17 | Hartlepool | North East | £1,943 |
18 | South Tyneside | North East | £1,961 |
19 | Isle Of Anglesey | Wales | £1,964 |
20 | Carmarthenshire | Wales | £1,966 |
Areas with the largest debts
Borough | Region | Average unsecured debt (among those who have debts) | |
1 | City of London | London | £5,535 |
2 | Wandsworth | London | £5,280 |
3 | Tower Hamlets | London | £5,094 |
4 | Hackney | London | £4,948 |
5 | Hammersmith And Fulham | London | £4,838 |
6 | Harborough | East Midlands | £4,832 |
7 | Islington | London | £4,766 |
8 | Westminster | London | £4,766 |
9 | Blaby | East Midlands | £4,612 |
10 | Lambeth | London | £4,571 |
11 | Southwark | London | £4,565 |
12 | Camden | London | £4,565 |
13 | Rushcliffe | East Midlands | £4,534 |
14 | Rutland | East Midlands | £4,534 |
15 | South Derbyshire | East Midlands | £4,472 |
16 | Hinckley And Bosworth | East Midlands | £4,472 |
17 | Greenwich | London | £4,449 |
18 | Kingston Upon Thames | London | £4,449 |
19 | North West Leicestershire | East Midlands | £4,445 |