Consumer Skills
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11th October 2004

NI CONSUMERS ARE £3 BILLION IN DEBT

<p>On average, consumers here are £2,300 in debt and four in ten struggle from time-to time or all the time to keep up with credit repayments.</p>

This means that excluding mortgages, Northern Ireland consumers owe around £3 billion on credit and debt (See note three).  The amount of debt per person increases to £15,300 when mortgages are included.  These are some of the shock findings in the Consumer Council's new report, Taking the Credit.

As the total amount of UK consumer debt hits £1 trillion, the Consumer Council's report is the first recent quantitative research to look at the wider Northern Ireland population's experiences of credit and debt. The report also contains the Consumer Council's top tips on budgeting and managing money, choosing and managing credit and what to do if you're finding it difficult to keep up. The report also calls for clearer information, more responsible lending and borrowing, better financial capability and more help for those in trouble.

Launching the report at East Belfast Independent Advice Centre, Alan Walker, Head of Consumer Affairs at the Consumer Council said: “Stories about credit and debt are never far from the headlines. While credit can be a very positive experience for some people, for others it can become a never-ending cycle of misery and despair.   To deal with this we firstly need more responsible lending from the credit industry and secondly need more responsible borrowing from consumers themselves.

“This research is vital because it is the first to look at the credit and debt situation in Northern Ireland and identify the scale and widespread nature of the problem. We will use the findings of the report to inform our contribution to the Government's Overindebtedness Strategy to press for resources and efforts to be targeted where they're needed most. The Consumer Council recognises the very important role that the advice sector plays in dealing with the problems of credit and debt on a daily basis.

“Every day, the advice and community sector find themselves at the very sharp end of this problem. Many people here find themselves in serious financial difficulty. In addition, they suffer a real sense of having no way out. We hope that this research helps to ensure that adequate resources are made available to deal with this issue.”

Other key findings in the report are:

·        Debt is highest in the 25-34 and 35-49 year old age groups.

·        Half of all consumers do not know what the letters APR stand for in a credit advertisement.

·        41% of credit card users have no idea what interest rate (APR) they are paying.  The same can be said for 57% of store card holders, 34% of those with a mortgage and 40% of those with a loan.

·        1 in 4 consumers have been overdrawn on their bank account in the past year.

·        Five per cent of respondents believed that they have more credit than they can afford and need to pay some off

·        14 per cent stated they had four or more credit commitments

·        One in ten stated that they spent more than a quarter of their gross monthly income repaying credit.  These people would be at risk of overindebtedness.

For copies of the report, contact the Consumer Council on 9067 2488 or download a copy from our website at: www.gccni.org.uk/publications

 

  1. General Consumer Council media contact: Susie Brown, telephone, 028 9067 4807 or e-mail, [email protected]
  2. The General Consumer Council is an independent consumer organisation, working to bring about change to benefit Northern Ireland's consumers. The Council campaigns for high standards of service and protection and a fair deal for all. It also carries out research, gives advice and publishes reports and other publications. It deals with individual unresolved complaints about electricity, natural gas, coal and passenger transport – contact the complaints line on 0845 601 6022.
  3. Average debt per person £2,300 multiplied by total population over 16 (1,289,206) (NI Census 2001) gives a total estimated debt of £2,965,173,800 i.e. £2.96 billion.
  4. For more information, visit our website at www.gccni.org.uk
  5. For information on the full range of consumer issues, visit our award-winning website at: www.consumerline.org