Scots Suffer from Highest Level of Debt in the UK

January 8, 2015

Luke-Notley small (Custom)New figures from debt charity, StepChange, reveal that the Scottish suffer from the highest levels of personal debt of all UK citizens. The council tax arrears and payday loan debts of Scots have been found to be significantly higher than the UK average.

The average payday debt of a Scottish borrower was found to be £1,438, over £125 more than the rest of the UK. Head of StepChange Scotland, Sharon Bell, explained: “We continue to see worrying levels of payday loan debt which are making a bad situation worse for too many Scots. Toxic high cost credit is being used as an emergency safety net and we need to find more sustainable ways to help people cope.”

In addition to payday loan woes, StepChange revealed that 39% of Scots who appealed to the charity in the first six months of 2014 were also in arrears on their council tax bill. The average value of council tax arrears for those who had fallen behind was £1,534 – almost double the UK average.

Compounding the misery, Scottish residents also had the highest electricity bill arrears in the country – averaging at £616.

Ms Bell continued: “The rise in people struggling to pay their priority bills is a stark reminder of just how difficult day-to-day living has become for many Scottish households. Keeping a roof over your head and heating your home are basic needs, yet for too many Scottish families, these are constant worries in the run-up to Christmas. Even where families are not in debt, many live on a financial knife-edge with small setbacks enough to tip them over the edge into problem debt.”

The Lothian region of the Scottish lowlands was shown to be the area most affected by debt, with average personal arrears growing from £1,443 in 2013 to £2,255 in 2014.

There could be some good news for Scottish payday loan borrowers however, with new tighter controls having come into effect from 1 January 2015. The new regulations will ensure that lenders cannot charge more than £15 for one-off defaults and caps interest charges at 0.8% a day.

If you are struggling to meet payday loan, rent or utility repayments, InControl’s dedicated team of financial advisors may be able to help you find the ideal solution. Call our team on 0800 072 6623 or visit our homepage to discover how we can help you.