Debt charity fields 20 calls per month from north west

Twenty people a month seek debt counselling.
Twenty people a month seek debt counselling.

Around 20 people per month are forced to seek the help of a debt advice charity in the North West.

The largest debt advice charity in the UK, known as StepChange, said that its clients in Northern Ireland owed an average - excluding mortgage debts - of over £18,000.

In the first three months of this year, people living in postcodes BT47, BT48 and BT49 made contact with the charity.

The average debt levels of people in Northern Ireland, the charity revealed, are around 20 per cent higher than in the rest of the UK.

The organisation, who work in partnership with the LCDI in Limavady, said its clients owed around £18,400 on credit cards and unsecured loans. The UK average is £15,300.

Mike O’Connor, StepChange Chief Executive, said: “The economy in Northern Ireland is not doing terribly well. There is growth at the UK level - that doesn’t appear to be felt in the wage packets of ordinary people in Northern Ireland and for many people their income has been flat and In real terms, possibly falling.”

The new report, Debt in Northern Ireland, highlights payday loans as a growing problem. Of the clients in Northern Ireland who contacted the charity in the first half of 2014, 23 percent had payday loan debt – up from just 4 percent in 2010 – a more than sevenfold increase. Those with payday loan debt owed an average of £1,689. This exceeds the clients’ average monthly income of £1,440, which could suggest that lenders may not be carrying out sufficient affordability checks before approving loans.

The danger is that people are not able to repay their loans and may become trapped in an ever increasing spiral of debt.

It also points to mortgage arrears as an area of concern. From 2009 to 2013, the charity saw a 57 percent increase in the number of people seeking help with mortgage arrears in Northern Ireland. In the first half of 2014, the average amount owed by clients on mortgage arrears was £3,249 – an increase of £974 from 2013. It is highly likely that interest rates will rise next year and those who are already struggling to meet their housing costs could find themselves in deeper financial difficulty.

It also notes that self-employed clients in Northern Ireland are £279 per month worse off than those in traditional full-time employment. The average debt level of self-employed clients is £36,271, and they are £169 short of what they need to cover their essential bills each month.