North-south debt divide

The UK is split down the middle when it comes to debt levels, new research shows.

Across England and Wales the average level of unsecured personal debt Britons get into before applying for an IVA is £38,000 - but residents of the south of England are carrying almost 50 per cent more debt than those in the north, figures from Debtmatters show.

IVAs (individual voluntary arrangements) are legally binding contracts between a borrower and all of their creditors to repay them only what they can realistically afford with the balance of their debt being written off.

In the north of England the average person applying for an IVA owes £31,000 compared with £45,000 in the south.

And this divide is in attitude as well as economics.

"Our figures show there is a clear north/south debt divide and there may be a number of factors that play a part in this," said Michael Shirley, of Debtmatters.

"We are all aware that wages are higher in the south of England and many people assume this automatically leads to higher levels of disposable income.

"However, the higher wages are often eclipsed by astronomical house prices and a public transport system which is now the most expensive in the world."

Debtmatters finds residents in the north ask for help sooner than those in the south, leading southerners deeper into debt before they call in the experts.

"It's often said that northerners are more up front and open and maybe this is reflected in debt," Mr Shirley added.

"Northerners appear more willing to admit to having a problem at an earlier stage, and the earlier we know about a problem, the more help we can offer.

"It's interesting that people in the south tend to earn more than their northern counterparts, but we are finding they also owe more, have a higher debt threshold and a different perception of what represents a problematic level of debt."