The Home Counties: the home of debt

Debt isn't just found in the inner-cities.

Where would you find the highest average amount of personal debt? If you polled the general public they’d tend to say the inner-cities.

Yes, they tend to get hit hardest by debt, but for the most indebted, we need to look closer to home. We need to look at the leafy suburbs of London and the South East.

Last week we highlighted how Richmond’s middle-class suburbia is tempered by the huge amount of unsecured debt that also exists in the area; along with being the best savers in the country, Richmond also contains some of the UK’s most indebted citizens.

Our newly-released 2010 Debt View statistics highlight Richmond’s problem. The average debt in the Twickenham area was £22,382, or 16% higher than the national average; next door in the Kingston upon Thames postcode, the average debt rose to £24,169 (25% higher than average).

But Richmond-ites aren’t alone in owing a huge amount of money; across London’s commuter belt average personal debt is sky high.

Our 2010 regional debt figures, shown in an infographic released today, show that Slough in Berkshire has the highest average debt in the UK, at a touch under £25,000. While this figure has actually fallen £2,000 since 2009, it’s still a monumental amount of unsecured debt (debt from credit cards, personal loans, store cards and the like).

The full list of the top ten debt areas of the UK shows the scale of the issue facing the South East:

1. Slough £24,946
2. Watford £24,783
3. Sutton £24,489
4. Kingston upon Thames £24,169
5. Guildford £23,945
6. Harrow £23,633
7. Crewe £23,177
8. Stevenage £23,076
9. Tonbridge £23,031

10. Chelmsford £22,708

Only Crewe, on the edge of ‘Cheshire set’ country, prevents the top ten being wholly London commuter belt (Redhill in Surrey is 11th). Four areas are within the M25 (Watford, Sutton, Kingston upon Thames and Harrow), while five are just outside (Slough, Guildford, Stevenage, Tonbridge and Chelmsford).

More tellingly, they’re all quite respectable towns (none are cities), with little in the way of ghettos, grubby tower blocks and the usual outward signs of what the general public perceives as “debt”, i.e. poverty. A scan of places 11-20 confirms these findings, with seven more commuter-belt towns.

And worse, despite the national trend of falling unsecured debt, Watford is one of the few areas in the UK to see a rise (by 5%) in debt between 2009 and 2010.

We’ve talked about middle-class debt in the past, highlighting that in 2009 “CCCS counselled over 2,000 [people who] earned more than 90% of the UK population, or over double the national median income.” It may seem obvious but earning a high income doesn’t preclude having a high amount of debt.

How can the Home Counties’ households avoid problem debt?

1. Budget wisely: Running costs are more in London and the South East so ensure the income and outgoings are balanced every month. Credit Action, our sister charity, has budget sheets and a budget builder on its website for you to fill in.

2. Don’t keep up with the Joneses: The suburban pressure to have the latest SUV, the family holiday in some “delightful out of the way place” in Tuscany or Provence, and public schooling for the children has to be resisted if there’s no money in the kitty. Learn about self control (point 3).

3. Don’t apply for credit that’s not needed: It tends to be easier for people in respectable towns to get more credit. Is it needed? Will you spend more if you’ve got the opportunity? Say no. If you’ve got too many cards, cut them up.

4. Use savings to pay off debts: Always pay debts off first rather than hoarding money while the bills stack up, especially as interest rates on savings are so low at the moment.

5. Learn to be more like a Shetland Islander: The Shetland Islands had the lowest average debt of any part of the UK in 2010, at £12,278 (less than half of the average debt of Slough). This is partly because there’s so much less chance of an impulse purchase in Lerwick than London. So follow the Islanders lead and avoid the impulse to spend.

We should all remember that while poverty and debt is linked, you can have debt without poverty. The huge figures, highlighting middle class debt around London’s commuter-belt, are testament to this.

As we said in our blogpost on the middle-class last year, debt “doesn't just happen to those with low earnings”. There are thousands of households in the leafy suburbs of the South East that are suffering from debt problems right now.

If you’re suffering from debt problems in the Home Counties or anywhere else in the UK then contact us for help and advice. Use our anonymous, online debt counselling to find a solution quickly.