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Personal debt remains ‘crippling’ problem

| Written by Chris Cope

CAB service manager Karen Eunson. CAB service manager Karen Eunson. DEBT continues to be a problem in Shetland - despite new figures claiming Lerwick has the lowest level of consumer debt per head in the UK.

Data released by UK Finance says that the average debt per capita in the Lerwick postcode area at the end of 2016 was £445 – but the local Citizen’s Advice Bureau (CAB) says it continues to have a high demand for financial advice.

The figure places the town as the least indebted area in the country, with neighbouring Kirkwall at £473 and Edinburgh, for example, with a debt of £544 per head.

One of the most in-debt areas in the UK is east central London with £756 per capita.

The figures should be taken with a pinch of salt, however, as the data collated does not include lending from all banks.

Nationally there is a growing trend towards more people having to borrow to get by, with the Money Advice Service saying that 8.3 million people have debt problems.

And locally there is a continued demand for debt advice and help in Shetland, despite the postcode average.

CAB’s local manager Karen Eunson said debt remains a “crippling problem” for locals.

In 2016/17, the local CAB helped 166 people with debt issues, with a total debt of new clients nearly reaching £1.1 million. Between 1 April and 31 August this year, the CAB had already supported 133 clients.

Thirty four per cent of local debts in 2016/17 were for bank loans and credit cards, while one fifth were for mortgages and rent.

Shetland also has a fuel poverty level of 53 per cent, meaning over half of its households spend more than 10 per cent of its income on heating – and this figure is higher still in some of the outlying islands.

“Debt continues to be a crippling problem for many people in Shetland,” Eunson said.

“The majority of CAB debt clients are living on a low income – 64 per cent of clients in 2016/17 had an income of less than £15,000 per year – though debt can affect anyone.

“High numbers of debt clients have a physical or mental health problem or a disability – 44 per cent of debt clients in 2016/17. CAB can provide individual assistance to identify priority debts, negotiate realistic repayment plans with creditors, and support with budgeting and ongoing money management skills.

“Where necessary, we can support clients through legal measures such as bankruptcy. Anyone with any concerns about their finances should contact CAB on 01595 694696 for free, confidential and non-judgmental support.”

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