coins household debt

High debt levels in Northern England and Wales leave people badly prepared for economic downturn

People in large cities and towns in Wales and Northern England have the most household debt and could be worst hit in the post-Covid economic downturn.

Press release published on 23 April 2020

  • People in large cities and towns in Wales and Northern England have the most debt and could be worst hit in the post-Covid economic downturn
  • People in Warrington have three times more debt on average than those in Oxford
  • County Court Judgements grew by over 110% between 2013 and 2018

People in large cities and towns in Northern England and Wales are in the most debt and will be hit hardest in the economic downturn. This is according to new Centre for Cities’ research authored by Kanishka Narayan mapping debt levels in England and Wales for the first time.

In Northern England and Wales’ cities people have the highest levels of debt relative to their incomes. On average, for every £5 people earn in Warrington, Swansea, Sunderland and Wigan, they owe around £1.

Meanwhile in Oxford and Cambridge, people owe just 35p for every £5 they earn on average.

Where are people in the most debt?
Rank City Largest percentage of total income owed Rank City Smallest percentage of total income owed
1 Warrington 21% 1 Oxford 7%
2 Swansea 21% 2 Cambridge 8%
3 Sunderland 21% 3 Exeter 10%
4 Wigan 20% 4 London 10%
5 Middlesbrough 20% 5 Brighton 12%

The economy now faces its most difficult period in living memory and one in five jobs in large cities and towns could be lost or furloughed. This puts people with higher levels of debt in particularly precarious situations.

While consumer debt is not necessarily a cause for concern, the inability to pay it off – or problem debt – is. Economically weaker cities hit hard by Coronavirus also have the most people struggling with problem debt, defined by the issuing of court judgements (CCJs).

While Ipswich, Liverpool and Hull top the chart, all but one of the places with the smallest proportions of people with problem debt are in Southern England where pay is higher and the economic impact of Coronavirus is weaker.

Where has the most problem debt?
Rank City Largest proportion of CCJs (per 100,000) Rank City Smallest proportion of CCJs (per 100,000)
1 Ipswich 4063 1 Cambridge 1223
2 Liverpool 3814 2 York 1323
3 Hull 3663 3 Exeter 1673
4 Sunderland 3638 4 Reading 1699
5 Blackpool 3635 5 Bournemouth 1715

Even before Coronavirus hit, many cities outside the South East saw steep increases people suffering from problem debt. Newport saw the sharpest rise of all – an increase of 2359 adults per 100,000 since 2013.

Southend and Basildon saw the smallest increases in problem debt, while York is the only northern city that hasn’t seen a sharp increase. These high debt increases leave people particularly exposed to income shocks such as redundancy or furlough.

The roots of this problem debt crisis lie in the 2008 Financial Crash. However, a decade of squeezed pay, flat productivity, welfare cuts and a more aggressive approach to debt collection have make it worse. Now the UK enters a new economic crisis, the Government must ensure that the people hit hardest last time are not dealt a double blow now.

Centre for Cities Chief Executive, Andrew Carter, said:

“The economic damage caused by Coronavirus is already hitting people’s personal finances. Unfortunately, as more and more people are furloughed or made redundant, those struggling with debt are likely to be worst affected.”

“To avoid people without a decent financial cushion falling into severe hardship, lenders should continue to offer relief to those in debt, and the Government should reduce the wait time for the first Universal Credit payment down from five weeks.

“Failure to support people with high levels of debt during this crisis will have a broader negative impact on the local economies of places where people are indebted – particularly those in Northern England and Wales.”


Notes to Editors

About Centre for Cities

  • Centre for Cities is a research and policy institute, dedicated to improving the economic success of UK cities.
  • We are a charity that works with cities, business and Whitehall to develop and implement policy that supports the performance of urban economies.
  • We do this through impartial research and knowledge exchange.
  • For more information, please visit org/about

About Kanishka Narayan

  • Kanishka is a former Expert Adviser to the British Environment Secretary and Senior Adviser at the Cabinet Office
  • He has also worked as an investment banker at Lazard.
  • He is now at Stanford University

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