Poorest households use the highest proportion of their income to pay off debts

The poorest fifth of households are using over 11% of their annual incomes to repay debts, compared to just over 3% for the richest fifth, campaigners said today.

The Debt On Our Doorstep campaign said levels of debt were in inverse proportion to household income and risked undermining the government’s attempts to reduce poverty.

Campaign chair Damon Gibbons said: “For the poorest 20% of households with debts, the growth in debt repayments will completely offset any growth in their income as a result of tax and benefit changes that have been made in the past six years and pull households under the government’s poverty line.”

The group and Citizens Advice Scotland are hosting a conference on Tuesday and Wednesday examining access to credit.