Dramatic geographic variation in Scottish salaries

23rd February 2011

The BBC News website has published details of the extraordinary variation in average Scottish pay levels, which differs greatly depending on the area an individual resides and works in.

Such findings are relevant for trust deeds providers as low income is traditionally a primary driver of unmanageable debt levels. This is increasingly the case as traditional sources of low-cost credit (the high street banks) are only choosing to lend to those individuals with the best credit-risk profiles. Low-income families may be left with high-cost credit as their only lending option, which is increasingly being seen as a precursor to debt management difficulties further down the line.

Pay may also have a large impact on the type of debt solution available. Those with higher earnings are likely to have a larger level of disposable income remaining once the cost of unsecured credit has been removed. This is likely to ensure trust deeds, Debt Arrangement Schemes or debt management plans are all feasible options. Where pay is lower and covers only essential expenditure, sufficient disposable income to fund such solutions may not exist, leaving bankruptcy as the only possible route.

Those living in East Renfrewshire had the highest average weekly earnings of £584. Analysis suggests that many of the higher earners in this area were in fact regular commuters to Glasgow. Those who actually worked in East Renfrewshire were ranked 27 th in Scotland, with an average weekly wage of £401.

Other higher-earning areas were Stirling, East Dumbartonshire (another Glasgow commuting area), Edinburgh and Aberdeen.

The five areas of lowest average weekly earnings were Orkney, Inverclyde, Dumfries and Galloway, the Western Isles and Moray.

The difference between the highest and lowest earning areas was a massive £196 per week. An economist explained that the main differences lay between rural and urban areas and pointed out that this was a long-term trend.

Income however, is not the only cause of of debt problems. Previous research has demonstrated that the single biggest driver of debt problems is an unforeseen life-changing event. As an example, such events may include divorce, ill-health, redundancy or child-birth. In many cases less dramatic events can be equally destructive - a loss of overtime or bonus payments can be sufficient for some people to no longer maintain existing credit commitments.

A survey conducted by debt advice website IVA.co.uk, has produced new interesting information regarding the added pressures relationships can place on personal finances. 33% of those individuals who were already concerned about money have purchased presents they could not afford for their partners, whilst 19% have done likewise with holidays. This demonstrates that emotional pressures, as well as life-changing events, can enhance the risks of financial difficulty.

For information regarding every aspect of trust deeds, our forum provides an invaluable resource. With contributions from many figures in the industry, as well as advice and support from individuals who have been through a similar situation themselves, we provide the answers to a whole host of questions.

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