Chester-le-Street Named Debt Capital of the Country.

The market town of Chester-le-Street has the highest levels of personal debt in the country, according to a recent report.

Residents currently owe an average of £5,248 on credit cards and loans, in comparison to borrowers in Northern Ireland who owe the least with an average of £2,291.

The study carried out by the credit reference agency Experian, who published a national debt map of the country, aimed to give a truer picture of debt by stripping back mortgages.

However Chester-le-Street District Council has serious doubts about the report which named the town as being the most debt ridden place in the country.

They believe that Experian’s research was inaccurate as it cited Chester-le-Street’s population as being over 114,000.

But the council estimates it at being less than 54,000, of which only 43,000 are eligible for credit cards.

They also scrutinize the figures as according to Experian areas surrounding the Chester-le-Street District, such as Durham, Sunderland andNewcastle, are shown to have debt varying between £3,367 and £3,397 per head.

The Council believes this minor variance as being inconsistent as it suggests that people in the town have nearly £2,000 more debt than their neighbours.

A spokesperson for the Council said:

“We thought it odd that people in Chester-le-Street should have the highest personal debt in the country, so we requested the information as was sent to the media by Experian.

“We found that Experian had Chester-le-Street’s population down as over 114,137 whereas, we have less than half of that number living in the entire District. Imagine if Experian had published London’s population as 15 million, we are sure they would have been chastised for poor research.

“The Council just wants to put the record straight, and having asked them what data they have used to reach this figure, it turns out that they’ve included people from Derwentside, and both Tyne and Wear Valleys, leading to this inaccurate portrayal of Chester-le-Street’s population.”

North-East: Debt-per-Head (Source: Experian)

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Graeme Leigh, Financial Planning Consultant for Orchard Finance blames buying luxuries.

“The trend in the public’s debt seems indicate that it is general commodities such as iPods, large Tv's and foreign holidays are what most people are buying on credit.

“It is often the case that people are spending this money on credit cards simply due to ignorance. People seem to have forgotten the way in which the monetary cycle works, for example there will always be varying times of 'boom' and 'bust' in the economy. Furthermore the members of the public in their 30's haven't experienced economic decline during their adult lives and are unaware of how quickly the economic climate can change. For example last May most people believed the housing market was as strong as ever and within 12 months the public are now more cautious about investing in housing.”

Leigh, whose company is based in Chester-le-Street, doesn’t think it is going to get any better.

“It has been forecasted that the average mortgage will rise by £200 a month and as people begin to have less cash, then they will turn to the credit card to pay for their weekly takeaways for example. Unfortunately their reckless spending over the past 3 years or so will leave many people with high levels of credit already. Furthermore inflation will make this situation even worse. World inflation fuelled by China and India's previous acquisition of raw commodities such as oil has seen diesel and petrol prices rocket recently and with prices expected to reach £1.50 per litre many people with high credit levels may face bankruptcy. Depressingly, this is only the beginning of the problems people will face.

“This poor economic situation is only going to get worse.”

But Chester-le-street wasn’t the only place in the North East mentioned in the Experian debt survey.

Bishop Auckland was the second highest in the area with residents owing £3,691 of personal debt each. This was closely followed by South Shields, Darlington and Redcar.

The seaside city of Scarborough was the regions lowest with only £2,776 per person owed to credit card and loan companies.

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