North East of England Wrongly Perceived as Most Debt-Ridden Region

GRANTHAM, England, July 15, 2011 /PRNewswire/ --

Levels of personal debt in the North East of England are nowhere near as high as people believe, according to a recent study by debt consolidation experts, Payplan.

According to the Debt Perceptions Survey 2011, 22 per cent of the public perceive the North East as having the highest levels of debt in the UK and most at risk of bankruptcy, but Payplan found that in reality just 4.9 per cent of their debt management customers in 2011 came from the area.

In contrast, the South East of England was viewed by the public as being an unlikely location for debt problems, with just eight per cent of respondents in the survey naming it as the top region for debt. But 13.7 per cent of Payplan's customers originated from the South East in 2011 - more than any other UK region.

Results also show that respondents believe that Londoners are next in line to the North East when it comes to struggling with debt, with 19 per cent of respondents naming the capital as the number one debt location. The reality is that Londoners make up around the same proportion of Payplan's customers as people from the North West of England - around 12 per cent.

In terms of housing status in relation to debt problems, 50 per cent of respondents in the survey said that the UK's renting population would be the ones laden with the most debt, while a slightly lower 45 per cent of respondents guessed that the problem would lie predominantly with homeowners.

In actual fact, Payplan's figures show that 51.25 per cent of its debt management customers are homeowners, while a much lower 35.16 per cent come from the UK's renting population.

Respondents in the survey believed that the lowest proportion of the UK's debt would lie with people who lived with their parents, with just one per cent guessing that the UK's debt problems lie with this portion of the population. In reality, however, people living with their parents actually account for six per cent of those who came to Payplan in search of debt advice in 2011.

Payplan's Internet Marketing Manager Paul McNulty, explained the significance of the results: "The disparities between perception and reality convey the endemic problem that the British population is simply not wise to debt and who's suffering with it.

"For example, it's fairly safe to assume that those living with their parents are perhaps the younger, less experienced and therefore more vulnerable part of the UK population. Alarmingly, our survey has found that six per cent of our customers fall into this bracket - much higher than our respondents perceived.

"It indicates an unawareness of the fact that debt is affecting our young people at a much greater level, and could therefore spell disaster for the financial futures of the youngest members of Britain's debt-ridden population."

In terms of monthly income, respondents tended to think that those whose monthly earnings lie between £1,000 and £2,000 would be more in debt than those who earn either the lowest (£0-£1,000) or the highest (£2,500-£3,000).

The investigation found that the average monthly income of a Payplan customer is, in fact, £1,808.60. 32 per cent of respondents therefore guessed the correct monthly income bracket of £1,500-£2,000, but an alarming 46 per cent wrongly believed the earnings of people suffering debt to be between £1,000 and £1,500.

Payplan's customer survey also shows that the average level of debt per head has reached a staggering £26,750 - a figure which will surely shock the 54 per cent of respondents who guessed that average debt lies between £15,000 and £25,000.

Only 13 per cent of those questioned guessed the correct debt bracket of £25-30,000, and only a fifth of respondents guessed correctly that the average debt would take nine years to pay off.

Despite the survey's alarming findings, however, Mr McNulty also issued some reassuring advice to those who feel rendered helpless by dire finances.

He said: "For anyone who feels that they are unable to cope with their debt or who can see their debt beginning to spiral out of control, I would strongly encourage them to contact Payplan. With 19 years of experience in the debt management profession, our expert advisers are here around the clock to offer free, impartial and non-judgemental advice, and will quickly be able to put them on the path to financial stability and peace of mind."