New Community Insight data on personal and mortgage debt; how much are your customers borrowing?

By Laura Carmody & OCSI - on 24/01/2018

It’s a new year - and we are starting as we mean to go on; with new data in Community Insight for you to peruse and utilise.

After the festive period many of us are feeling the pinch and tentatively check our bank balances, with bated breath, whilst mentally calculating the cost of necessities for the next few weeks until pay day. However, for some the task of checking bank accounts can be incredibly stressful every month, not just after the holidays, with monthly income not covering all living costs and the reliance on personal loans to plug the shortfall.

Much of the open data available on the local economy and personal finances is published at local authority level or higher, and so can’t tell us much about the picture at for example, ward level. The newest data addition to Community Insight shines light on the more local picture of personal & household debt, providing further information to help shape the services you offer. 

What the data can tell us?

Although high or low levels of personal and household debt are not necessarily an indicator of economic health; when looked at in conjunction with other measures it can help to inform some local policy decisions as well as provide further indications for the need for support programmes around financial capability and inclusion.  

In 2017 the Joseph Rowntree Foundation (JRF) published their annual report on the Minimum Income Standard which looked to answer the question “how much money is required for an adequate standard of living?”; £17,900 income for a single, working age person, £29,600 income for a lone parent with one child and £40,800 combined income for a couple with two children.

In areas such as Bradford (shown below), the lowest average total weekly income equates to an average annual income of between £17,680 and £31,720. Depending on the household make up, these annual incomes could leave a significant shortfall in living costs for an adequate level of living. Therefore, areas in which there are high levels of personal debt combined with low wages or high unemployment, could suggest that some people in these areas were struggling to make ends meet and resorting to credit in order to meet living costs and everyday needs.

Equally, areas where there are high levels of personal loans and / or mortgages are likely to be less resilient to stagnating wages and rising interest rates; which could lead to loan and mortgage repayments becoming a burden.

Identifying these areas that are likely to be at greater risk of unmanageable debt, could be useful in helping local authorities and charities to target crisis support schemes or short term loans schemes.

In addition; it could inform decisions around where best to target preventative advice programmes. Citizens Advice Bureau talks about a “preventative advice gap” - the concept that one of the reasons people don’t get money advice is that it is not designed, or delivered, in a way that helps to avoid getting into financial difficulties. Access to local level data on personal debt, could support service providers to better collaborate and target early intervention programmes. For example; in Hull, Citizens Advice works in partnership with the local Clinical Commissioning Group to provide advice services in 19 GP surgeries.

About the data:

We have included two new datasets in Community Insight

  • Mortgage debt per household
  • Personal debt (unsecured loans) per person aged 16-64

The data is from UK Finance, who publish detailed figures for loan balances by postcode sector across mortgages, unsecured personal loans and SME loans. (We haven’t included SME data for now - but please let us know if this would be a useful addition!) The lenders that participate account for 73% of mortgage lending and around 60% of personal loans. UK Finance provide additional notes on their methodology here.  

In order to add this data into Community Insight, we have modelled the data to Output Areas, using apportioning based on population for personal debt data and number of households for mortgage debt data. Get in touch if you’d like more information on our methodology.

Further reading:

For some interesting breakdowns of household and personal debt by age, gender and income, take a look at some of the findings from Value Penguin and The Guardian have their own interactive explorer, which shows the per capita value of consumer credit as of the end of 2016.

Explore Community Insight and Personal Debt for yourself

Explore the data for yourself in more detail for the wards and specific communities you work in, alongside more than 800 other datasets. To find this data don’t forget to look under the unassigned data sets within Group Admin > Manage your indicators, and search for Debt.

Don’t have access to Community Insight? Request your free demo of Community Insight today by clicking here. A member of the HACT team will be in touch.


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