64% of North East adults are in the red, with debts averaging £5.5k

The average indebted North East adult owes over £5.5k (£5,583), according to new research by the regional arm of insolvency trade body R3.

This figure, which excludes mortgages and student loans, is equivalent to 12 weeks’ average weekly earnings for a UK worker (£481 per week) and seven months’ average rent in England & Wales (£770 per month).

The latest findings of R3’s regular Personal Debt Snapshot show that 12% of those surveyed in the North East, Yorkshire and Humberside owed more than £10k.

While at the other end of the scale, 36% said they were without any debts and a further 27% stated they owed less than £2k.

The R3/ComRes poll of 2,000 British adults also found that 4% of British adults owe over £20,000, excluding mortgages and student loans.

Allan Kelly, North East chair of R3 and a restructuring partner at Baker Tilly North East, says: “The fact that our region’s average personal debt is equivalent to almost three months’ wages is a cause for concern - that’s a lot of ground to make up if debts need to be repaid quickly or if someone’s income is interrupted.

“Personal debt levels have ballooned in the UK over the past decade. For many, being in debt has become the norm; there’s much less of a stigma attached. Where the debt is manageable, this isn’t a problem. But it can be all too easy to get caught in a debt trap, where one debt starts to create others.”

“Some levels of debt are extreme, but even those with relatively low value debts need to tread carefully. You only need to be unable to pay £750 to one creditor and it’s within their right to petition to have you made bankrupt.

“If people have problems with their debts, early action is best. The more debt builds up, the fewer options there are. The 7% of adults who owe over £15,000, for example, would be ineligible for a Debt Relief Order.”

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