New data from personal insolvency provider Creditfix has revealed that average debt levels in Reading have increased by 37% since 2022, the third-highest increase in the UK, as the cost of living continues to hit household finances.
The Personal Debt Index is compiled using data from more than 185,000 people across the UK who have received help with their finances through an IVA with Creditfix.
This significant increase reflects the growing financial burden that many people are facing due to the high cost of living in the UK.
According to the Office for Budget Responsibility, UK households will spend £83 billion in servicing debts (mortgages, credit cards and personal loans) during 2023-24 – an increase of 52 per cent from 2022.
Reading has seen unsecured debt levels rise from an average of £14,687.81 in 2022 to £20,087.12 in September 2023 – a 37% increase.
Commenting on the data, Greig Chesney, operations insight and analytics manager, at Creditfix said: “These figures show the impact that the cost of living crisis is having on households across the UK. Debt doesn’t discriminate, something that’s evident when you look at the data.
“Data from the Centre for Cities show that wages in Reading have only grown by 2.8% since January 2022, whilst inflation has been as high as 10.8%. Coupled with the forecasted increase in debt servicing costs, it’s clear the long-term financial impact the cost of living crisis is having on individuals and families will be around for a while.
“It is clear that urgent action is needed to address this issue and provide support for those who are being disproportionately affected by the high cost of living in the UK.”
Stephanie Chapman, chief operating officer at Creditfix, added: “The cost of living crisis is continuing to cause huge disruption to personal finances across the UK. Rising prices for essential goods and services such as housing, utilities, and food, coupled with stagnant wages, have left many households struggling to make ends meet.
“As a result, more people are turning to credit cards and loans to cover their expenses, leading to a worrying increase in overall debt levels.
“The findings of our personal index show that, now more than ever, it’s important for individuals to seek help with their debts before the problem becomes insurmountable.”
To help the nation make the first steps in their debt recovery journey, Paul has shared his advice to help people take control of their finances:
Review your current finances
He said: “Take control of your finances by creating a comprehensive budget that covers all aspects of your financial situation. By taking this step, you will be able to get a clear understanding of your income, expenses, and debts.
“You can then put together a plan to tackle your most expensive debts first and develop strategies to cut back on unnecessary spending. This is where it is important to review your subscriptions and cancel any that you no longer use.
“Take the time to research and compare banks to find better rates or rewards that can help improve your financial situation. Budget apps can be really helpful here too.
“However, do not be afraid to seek guidance from professionals such as financial advisors who can provide you with valuable insights and tools specific to your situation. They can help you make informed decisions about your money and guide you on how to effectively manage and allocate your resources.”
Check your entitlement
“It is so important to check your entitlement to various benefits and support programs. Explore online resources and government websites that provide information on potential benefits that you may qualify for.
“Stay informed about any changes or updates to existing benefit systems, as new opportunities may arise that you were previously unaware of. Reach out to local community organisations or charities that specialise in linking individuals with available resources and support.
“Online tools or calculators to estimate the benefits you might be entitled to can help you determine the potential impact on your finances, including council tax discounts and cost of living benefit payments.”
Ask for help
“No one should face financial challenges alone. Many people struggling with their debts feel a stigma or sense of shame which prevents them from opening up, but this is a vital step to finding a solution.
“Seeking support and guidance from trusted friends or family can help to take away some of the weight that is brought by money worries. Some of them may have also faced similar challenges and they will be able to offer their own insights and experiences.
“If you find yourself overwhelmed by debt, seek professional support. These experts can help you navigate your situation and develop effective strategies for managing your debts”
