The Uk’s Debt Crisis And The Most Impacted Towns And Cities

The cost of living is an ongoing issue within the UK, with households continuing to feel the effects of rising costs, debt, pay stagnation and soaring interest rates.

The country is seeing high-interest mortgage rates, people using savings, borrowing money through consolidate loans, and getting into debt to pay for essentials because of the rising cost of living, and a recent ONS survey shows that of the 55% of adults who saw an increase in their cost of living in May 2024 compared to the month before, 14% reported using more credit than usual as a result.

Taking a closer look at this, we’ve researched the UK’s most populated towns and cities most impacted by increasing levels of debt and those most open to financial advice.

To achieve this we collated the average monthly searches surrounding ‘debt advice’, as well as unemployment rate, average annual gross mean salary, and cost of living with rent per person.

Our research has demonstrated the 20 towns and cities that are the most impacted by debt as they have the highest amount of financial worry-related Google searches per person, unemployment rates, and the impact of the high cost of living on their income.

The town of Rochdale in Greater Manchester ranks highest with an average of 419 debt-related searches a month, a 9% unemployment rate and a cost of living of £1,275 per month, which is half the median monthly salary.

In second place is Bolton, also located in Greater Manchester with the highest volume of searches for debt advice when compared to its population. There is an average of 678 searches per month and a population of 141,331.

Greater Manchester is the region in the top 20 that ranks the highest for the volume of people searching for debt advice. According to research by the Citizens Advice Bureau, almost 250,000 people are ‘living in the red’ across the region. Bolton and Oldham are two of the hardest hit boroughs in the region, according to the research, with around one in 10 people – 33,000 people in Bolton and 22,000 in Oldham – struggling to cover food and bills.

An overview of England’s unemployment rate

Rank	Segmentation	Unemployment Rate	Percentage of Population
1	Oldham	10,790	10.3%
2	Rochdale	9,080	9.3%
3	Croydon	15,210	8.8%
–	Bradford	26,215	8.8%
5	Bolton	11,040	7.8%
6	Birmingham	68,295	6.9%
7	Manchester	25,315	6.4%
8	Rotherham	7,160	6.1%
9	Doncaster	8,685	5.5%
10	Leeds	24,690	5.4%

 

Numerous factors can contribute to individuals seeking debt advice and unemployment can be of huge concern to individuals.

The unemployment rate has risen to its highest level for two and a half years, official ONS data shows. The rate climbed to 4.4% in the three months to April, the highest since September 2021.

Oldham, Rochdale, Croydon and Bradford are the areas worst affected by high unemployment rates, with 10% of the working population in Oldham currently unemployed.

Our data highlights that the North is most affected by high levels of unemployment, including major cities such as Birmingham, Manchester and Leeds.

What impact is the Cost of Living continuing to have?

Rank	Segmentation	Monthly Salary	Cost of Living pp including rent	Disposable Income
1	Nottingham	£2108.08	£1,560	£548
2	Leicester	£2274.17	£1,426	£848
3	Hastings	£2251.58	£1,380	£872
4	Mansfield	£2267.92	£1,361	£907
5	Blackpool	£2127.08	£1,205	£922
6	Stevenage	£2524.17	£1,588	£936
7	Newport	£2490.25	£1,537	£953
8	Oxford	£2884.08	£1,928	£956
9	Birmingham	£2583.25	£1,590	£993
10	Cannock	£2361.33	£1,366	£995

 

Many families continue to feel the squeeze of high food, energy and housing prices with the ongoing cost of living crisis. Despite inflation returning to near-normal levels after skyrocketing in recent years, energy bills and food and household items still cost more than they did pre-pandemic when they started their steep climb.

Wages may also be on the rise, however mortgages and rents have soared along with interest rates, taking large chunks out of many household incomes.

Analysing the average monthly salaries across England and the total cost of living per person, including rent, we calculated how much money on average do individuals have left over.

Nottingham is worse affected with only £548 disposable income leftover each month once the cost of living is removed.

The locations with the highest cost of living were London, Croydon, Oxford, Woking and Cambridge.

Samblas advice on managing debt:

Marcus Sätherström at Sambla says:

“Being in debt is a stressful situation and breaking down your financial landscape can be a good place to start to make it more manageable. Begin by assessing your situation and understanding how much you owe and to whom, taking into account interest rates and minimum monthly payments.

“From here you’ll be able to set a realistic budget that accounts for all of your expenses, and help you to identify if there’s any areas where you’re able to cut back. It’s important to prioritise paying off high-interest debts first like credit cards, while making minimum payments on the others.

“If you have multiple high-interest debts, consider streamlining your payments into a consolidation loan with a lower interest rate, making your debt more manageable and reducing the total amount you’ll pay over time.

“You can also take this opportunity to reach out to any creditors and explain your situation if you’re struggling to make payments. Many are willing to work with you to negotiate a more manageable payment plan.

“Not all financial situations are the same, and seeking tailored advice from a financial advisor can be very valuable. Lastly, stay committed to your repayment plan and avoid acquiring any new debts to prevent your financial situation from worsening. Remember, managing debt is a journey that isn’t solved overnight, and it’s important to also celebrate each milestone along the way.”