SCOTS are more in debt than people in the rest of the UK with average loans at £4566 – nearly 50% higher than the UK average of £3104, The Sunday National can reveal.
One in 10 Scots is having to borrow money to pay rent or their mortgage while the same number (11%) are taking out loans to consolidate other debts.
The research also shows that just under one fifth of Scots (17%) had been forced to take out a payday loan to avoid a financial disaster when the banks refused to help them.
The figures have been released in the UK’s first National Borrowing Index which has been drawn up by FairMoney, the fair loan comparison site. It shows that Glaswegians, in particular, are in a debt trap and struggling to make repayments.
FairMoney founder Dr Roger Gewolb is now calling for people to be given access to fairer finance.
He said that over the last few years there had been a “significant” rise in the amount that people are borrowing and this was likely to get worse because of the pressures on the economic climate as a result of Brexit.
“We are really addicted to debt and it is getting worse,” he said. “There are 14 million people – that’s 25% of the UK population – on the poverty line.
“Millions of people don’t have food to eat and that is in a country like the UK.”
Average loans in Edinburgh are £6290 versus £2375 in Glasgow but Dr Gewolb said this probably reflected the difference in average salary – £25,264 in Edinburgh, a third higher than Glasgow’s £17,760.
Dr Gewolb said: “The reason for the loan is important – 21% of loans in Glasgow are for unexpected bills and 15% for life events including funerals while the corresponding numbers in Edinburgh are around 3% for each.”
However he pointed out: “The people at the bottom in Edinburgh are no better off than their Glaswegian compatriots with 7% of both being refused credit four or more times.”
Dr Gewolb said the recent UK Budget had done nothing to help.
“Not only does it not do anything but it pretends to do something about it.
“The tax threshold was raised but the Chancellor never mentioned that National Insurance was going up which will take away half of everything saved, so it is just smoke and mirrors.
“We should be passing laws to help people so that there is a uniformity of rates and legislation around putting people into debt.’’
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