Cost of living crisis: Data shows Manchester’s financial health

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Greater Manchester constituencies score higher on the Financial Vulnerability Index than the UK and North West averages.

Households are struggling with high levels of inflation and skyrocketing bills as part of the cost of living crisis, and new data shows how Greater Manchester constituencies are faring.

Manchester has been experiencing above-average levels of financial vulnerability since the peak of the Covid-19 pandemic in the summer of 2020 and it has only dipped slightly, data experts say.

And there is concern that the use of credit is rising sharply in the Northwest as households try to cope with everything that gets more expensive.

What is the Financial Vulnerability Index?

The FVI measures how vulnerable residents living in an area are to financial problems and there are six things it uses to measure that.

They are the percentage of people in an area who are delinquent, who claim benefits, who have high-cost loans, who lack emergency savings, and who rely on alternative financial products like payday loans.

The sixth measure considered is the average use of credit among residents to determine how much they depend on it.

Each parliamentary constituency gets an overall score between 0 and 100. The higher the score, the more financially vulnerable the residents of an area are.

The index is a joint project between the credit management services company Lowell and the Urban Institutea US-based research organization,

It is based on anonymous data from around 9.5 million Lowell UK customer accounts and other publicly available data sources.

What does the index show for Greater Manchester?

The latest FVI figures show that Greater Manchester constituencies are significantly more vulnerable than average.

The UK average score is 43.1 and the North West average is 49.1.

But the latest index gave Blackley and Broughton a score of 60.9, with about 60% of adults in the district lacking emergency savings and more than a quarter in default.

Manchester Gorton has an index score of 58.1 and Wythenshawe and Sale East had a financial vulnerability rating of 56.9, while Bolton South East was 56 and Oldham West and Royton were 55.7.

At Salford and Eccles it was 53.5, while at Manchester Central it was 53.3.

The latest figures released from the index also show that Manchester has been experiencing above-average levels of financial vulnerability since the second quarter of 2020, only declining by 3.1 points since then.

And like residents of the North West as a whole, Manchester’s credit usage rises as bills rise, with the city’s average credit usage reaching 51.9%.

What does the index show for the UK as a whole?

The latest updates to the index show that, across the UK, households are turning to credit as inflation means daily necessities now cost more. Credit usage in the latest quarter was the highest since the beginning of 2020.

Interest rate increases have also done nothing to deter the most financially vulnerable residents from borrowing, which the index’s creators say shows that for the most disadvantaged consumers, having to borrow money is a necessity, not a necessity. option.

There is better news, however, as financial vulnerability in the UK has declined overall since the index was last updated, which experts say is mainly due to a decline in the proportion of adults claiming social benefits.

Payday loans across the UK have also continued to fall.

What has been said of the latest figures?

John Pears, CEO of Lowell UK, said: “The cost of living is rising across the board and it is hitting North West cities like Manchester hard.

“Households are having to shell out more money to pay for essential items like food and bills. With the rising cost of living stretching budgets to the limit, people are increasingly turning to credit.

“For many now, a single hit of income can be enough to push a household into debt trouble. People need help cutting costs.

“The new government must take steps to ensure that households, especially those with lower incomes, get the support they need.

“With the recent price cap changes, lowering energy bills should be the priority. This needs to be at the top of the agenda.”

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