A study by the Money Advice Service has revealed that almost 9 million individuals in the UK are suffering from severe financial difficulties, marking the latest chapter in the ongoing cost of living debate.The findings indicated that five English cities made up the largest proportion of the country’s total debtors with a monumental 40% of people in these areas begin trapped in a cycle of debt.
Furthermore, almost 20% of UK citizens disclosed that they had ‘serious financial issues, whilst 75% of these people identified that they were extremely ‘unhappy’.
The Money Advice Service is understood to have conducted the survey in order to understand the thoughts and lives of people trapped in debt better.
And the organisation have revealed that they believe the study has achieved this aim, with the findings being able to finally provide the concrete evidence needed to spur new action on addressing the nation’s debt issues.
The news comes on a day when similar findings from think tank the Resolution Foundation indicated that there was a lack of social mobility in the country in the last ten years. The collective nature of these studies indicates that the country’s high levels of personal debt is a result of more than just the economic downturn; it can be argued that it has been an endemic issue that has been substantiated by the crisis but not caused by it.
“Millions of people could escape their spiral of debt by accessing free advice,” said Caroline Rookes, the chief executive of the Money Advice Service
“We know it transforms lives and the sooner people access it, the better – to take steps to improve their life for good,” she said.
The organisation has highlighted five of the worse affected cities in England as being ‘over indebted’, defining the term as anyone who had missed over half their loan repayments in the past 6 months or allocated most of their income towards debt.
Hull topped the list of indebted places where a monumental 43% of people disclosed that they were struggling financially.
Nottingham, Knowsely, Manchester and Nottingham completed the list with almost two fifths of the population in these areas trapped in debt.
“The issues highlighted in the study are no surprise, it’s there for everyone to see,” said Jessie Castle, a mother from Hull.
Last week it was revealed by the Bank of England that the country’s collective personal debt had now surpassed £1.4 trillion, with this statistic rising steadily over the past few years. Alarmingly this is almost an identical figure to back in 2008, when the recession was thought to be in full flow.
The study raises doubts about whether current government policy is addressing or sustaining people’s debt problems because it appears to be leading people towards debt rather than emancipation from it.
Yes, the large proportion of the world’s economies is based on debt, and loans such as mortgages and credit cards are inevitable spending for the average consumer.
But recent benefit cuts, a lack of swift action to address rising prices, the Bank of England keeping interest rates low and a consistent rise in tuition fees are perhaps to blame for the continually high levels of debt.
Perhaps creating more platforms for people to enter into high income employment would help alleviate the problem as it would improve people’s social mobility and help them get into high salary jobs. Setting up more free grammar schools in areas such as Hull and Wales would perhaps help more working class people move into the jobs dominated by the middle class bourgeois currently and might make a dent in the current ‘collateral damage’ mentality afforded to low earners at the moment.
Implementing a nationwide living wage could also be a viable course of action because then personal debt could be attributed to individual money mis-management rather than constantly be the fault of a harsh and unhelpful financial environment.
Regardless of what is chosen to be done to address the findings, the country clearly has a severe debt problem, and whether encouraging consumers to spend, and increasing financial demands on them is the best thing for the government to be doing right now is a no-brainer indeed.