Northern cities and towns facing debt 'avalanche'

People in lots of areas of Northern England and also the Midlands face an ‘avalanche’ of debt as Covid-support is eliminated come july 1st, according to new information.

Centre for Cities has warned the government’s roadmap for withdrawing coronavirus support will hit individuals its northern border and Midlands disproportionately hard and, in a blow to the levelling up agenda, risks leaving the united kingdom more divided than ever before. The think tanks claims that division between homeowners and people in social housing are also prone to increase, with social housing residents and people on low incomes far more prone to have fallen into debt throughout the pandemic.

The report claims that during the pandemic people in richer neighbourhoods in predominantly southern cities cut down on luxuries and reduced their outgoings a lot more than people in poorer neighbourhoods in – mostly northern – cities who spend proportionally more about food, bills and other essentials. As a result, for every £1 that people from less affluent areas saved, people in richer areas saved £12.

As a result, individuals around 1 / 2 of neighbourhoods in Hull, Bradford, and Liverpool will probably happen to be pushed into debt attempting to satisfy the price of essentials because of pandemic job losses, furlough and a lack of savings.

On another hand, people in Exeter and York are the biggest financial beneficiaries of lockdown, with those residing in eight in ten neighbourhoods being in all likelihood to have boosted their savings.

Four from the five cities where people are likely to have saved money during the pandemic are in Southern England as the top five places where individuals are most likely to possess fallen into debt are in Northern England – three in the Red Wall.

The think tank shows that the government produce a specialist debt settlement scheme for those who have incurred Covid-related debt, in addition to keep the £20 Universal Credit uplift.

Andrew Carter, leader of Centre for Cities, said: “The pandemic has left america more divided than ever before. While people in mostly prosperous southern towns and cities have accumulated £150 billion of savings, many less affluent individuals its northern border and Midlands will face an avalanche of debt as Government support ends later this season.

“The Government is withdrawing financial support far too quickly for people in places that have been hit hard through the pandemic. Not only will this set its levelling up agenda back significantly, it also risks levelling down many previously affluent parts of southern England such as Crawley.”