/ Money

Regional debt divide: is it grim up north?

It won’t surprise you to hear there’s a divide in economic prosperity between different regions of the UK. But what might surprise you is the scale of the disparity.

Although I live in the south east, I’m a northern lad at heart. I’ve gradually moved south over the years from Grimsby to London via West Yorkshire, Nottingham and Birmingham.

While things aren’t easy in London and the surrounding areas – when I talk to friends from home I realise that things are worse for many people outside my south-east bubble.

The difference in debt

Which? research into regional debt levelsOur new research into regional debt levels only reinforces the idea of a regional divide. In the nine English regions, people in the North East have the most debt per pound of income, owing 34p for every pound in gross income. The North East is followed closely by the West Midlands, at 33p. By contrast, the average debt-to-income ratio in the South West is 12p to every pound, while in the South East it’s 17p.

Our recent Quarterly Consumer Report shows that many people are struggling to cope: 2.4 million households have resorted to borrowing money from friends and family, while 11.3 million households have taken out additional finance.

The one figure in our research that really surprised me was the debt level in my native Yorkshire and Humber – just 13p for every pound of income. However, I suspect that the headline figure may disguise disparities within a region. So, for example, while there are affluent swathes of residents in Yorkshire and North Lincolnshire with low debt levels, there are also pockets of people who are really struggling.

For example, a report by the Work Foundation last year found that towns such as Doncaster and Grimsby are youth unemployment blackspots: as many as one in four young people were not in employment or education – known as ‘NEETs’.

We need free debt advice

We’re urging the government to safeguard funding for debt organisations like National Debtline and Citizens Advice. National Debtline is accessible to anyone, no matter where in the UK they live, while Citizens Advice Bureaux has both local knowledge and a high street presence. Both services are indispensable in the current climate.

At a time when public spending is under pressure across the UK, I think it would be a false economy to withdraw vital debt advice services from those who might otherwise turn to payday loans, doorstep lenders and worse.

How are things in your local area compared with the national picture? And if you’ve used a free debt advice service, what’s your experience been like?


Why not write off (reduce at least) household debt with quantitative easing funds rather than push it through the banking system? This would kick start consumer spending and the circulation of money known as the economy. Just a thought.

Martyn, can you please explain the basis of the calculations that lead to these Regional Dept figures For example, if a household has an income of say £30,000pa and a mortgage of £60.000 as their only debt what is their Dept figure?

Thanks Martyn.I find these stats a puzzle and suspect that many other people do too.Can you give some examples of what the population of the North East is doing compared with the South West?This might clear the fog and get this conversation going!

It is not simple to say exactly why people in the North East are struggling more than those in the South West, however there are a few factors which may be impacting people.

One of the reasons for a north/south divide is unemployment. Unemployment in the North East is at 10%, compared to at 5.7% in the South West, this may in part explain some of the differences.

Secondly, there are regional differences by disposable household income. On average, households in the North East have a lower disposable income than in any other region. Therefore, even if amount of level of the debt is the same, it may be a greater burden for those on lower incomes.

In addition, our research shows that people who are typically facing the greatest squeeze on their finances, have a mortgage and have children (we call them the ‘Stoic Strugglers’) are more likely to live in the North East. Hope this helps a bit.