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The rising cost of living is now the main factor pushing people in the North West into debt – outstripping traditional factors such as job loss or relationship breakdown, according to research by the insolvency trade body R3.

Over half (53 per cent) of North West people with debt concerns now blame rising living costs and the failure of wages to keep pace, the survey shows. This compares to 21 per cent who blame spending on non-essential items such as a holiday, 16 per cent who cite the loss of a job and 12 per cent who blame a relationship breakdown.

There are also indications that the cost of childcare is crippling families, with 10 per cent now citing this as a factor in their debt problems.

Jeremy Oddie, North West regional chair of R3 and head of recoveries at accountants Mitchell Charlesworth, said: “In the past people with debt problems tended to blame one-off events, such as losing their job, getting divorced, paying for a new kitchen or an expensive holiday. Nowadays, rising living costs and wages failing to keep up is a reason alone. The prolonged effects of this squeeze, together with the rising cost of everyday items such as food and fuel, are taking their toll on the nation’s finances.”

Jeremy Oddie said he was particularly concerned about those ‘on the extremities of the debt landscape’ – those with no savings or saddled with payday or other high-cost loans.

“Our research indicates that in some cases, people are prioritizing repayments on a payday loan over spending on essentials such as food,” he added. “According to the providers, payday loans were created as one-off fix to a financial shortfall. While they are convenient and quick to access, paying them back can be a much greater slog. I would question whether the loan was right in the first place if repaying it means someone has to prioritise that over food.

“I would urge people in this situation to consider all their options, including speaking to an insolvency professional.”