Debt is on the rise in the West Midlands with the average family owing £8,990 on top of their mortgages.
The region has the four highest average debt in the country, after it rose from £8,775 six months ago.
This is almost £7,000 more than typical monthly income in West Midlands, which stands at £1,942, and more than three times higher than the typical savings pot of £2,438.
The research, from Aviva’s Family Finances report, shows debt has reached the highest levels seen for two and-a-half years.
Nationwide, average family debt now stands at £13,520 – marking a leap of £4,000 from the average debt of £9,520 in summer 2015.
The latest report, covering winter 2015, fuelled concerns that many families’ finances are finely balanced and the continued availability of cheap credit is leading to households racking up debts on credit cards, overdrafts and personal loans which could become problematic as and when interest rates start to rise.
Couples with two or more children tend to have the biggest debts, the report found.
Recent Bank of England lending figures have prompted concerns from charities about the levels of credit being taken on by consumers. There has also been speculation that interest rates could start increasing this year, pushing up the cost of borrowing.
Louise Colley, managing director, protection, Aviva, said that while families’ increased savings levels compared with 2010 are to be welcomed, their finances are still “precariously balanced”.
She said: “The alarming levels of rising household debt, along with a recent reduction in income and savings levels, paints an uncertain picture for the family purse in 2016.
“With the possibility that the Bank of England could raise interest rates this year, families who have grown accustomed to cheaper credit - particularly those who have spent heavily over the Christmas period - need to ensure they are still fully prepared to manage debt repayments, as well as other monthly outgoings, should rates go up.”
More than 2,000 people aged between 18 and 55 years old from across the UK were surveyed for the report.
The data reveals
- Families in the West Midlands are more likely than the average UK family to have credit card debt – 50 per cent compared to 47 per cent across the UK.
- More in the region owe money on a personal loan – 27 per cent compared to the UK average 24 per cent.
- 21 per cent of families in the West Midlands owe money on an overdraft, just below the national average across the UK of 22 per cent.
- Families in the West Midlands are less likely to save or invest money each month: 30 per cent do not do so, compared with 25 per cent across the UK.
- More than a quarter (27 per cent) of families in the West Midlands also say they have made no financial preparation for the future – above the UK average of 22 per cent).