Cost of living crisis: Five of top 10 hardest hit constituencies in the whole of UK are in Merseyside

New research pinpoints the areas of the UK where struggling families will be least able to withstand the cost of living crisis - with Merseyside constituencies particularly hard hit.

Many households in major cities and areas have been left financially “scarred” by the coronavirus pandemic, with high-cost debts and little in the way of savings.

But families in five of Merseyside’s 15 constituencies are set to be among the worst affected in the country, with Liverpool Walton the worst hit area in the whole of the UK.

And every Merseyside constituency has a worse financial vulnerability score than the nationwide average of 45.1.

Research from debt collection company Lowell and the US-based Urban Institute think-tank shows that Knowsley, Liverpool West Derby, Birkenhead and Bootle join Liverpool Walton in the top ten constituencies set to be hardest hit by the crisis.

It means they are far more vulnerable to the further economic shock of the cost of living crisis, according to the study.

The researchers said people in these areas are still grappling with the effects of the pandemic, despite the recovery seen elsewhere.

“Many constituencies ... saw high levels of vulnerability before the pandemic, something that was exacerbated by successive lockdowns,” the study said.

“These areas have become ‘scar tissue’, immune to the general upswing in the economy seen as the pandemic ebbed.”

Birmingham, Manchester, Liverpool, Leicester and Newcastle are the biggest cities with this scarring effect, only seeing marginal improvement in their financial vulnerability since the peak of the pandemic.

How does the data work?

The researchers’ Financial Vulnerability Index scores an area from 1 to 100, with higher numbers signifying greater financial vulnerability.

It combines analysis of Lowell’s 9.5 million customer accounts with official statistics from the UK Government and Office for National Statistics.

It is based on six components that capture a household’s ability to manage daily finances and resist economic shocks: carrying debt in default, using alternative financial products such as payday loans, claiming work-related benefits, lacking emergency savings, holding a high-cost loan and relying heavily on credit.

What does the research show?

In the UK, Liverpool Walton has the highest financial vulnerability score (67.8).

This is followed by Middlesbrough (66.9), with Birmingham, Hodge Hill, in third, with a financial vulnerable score of 65.1.

Knowsley (64.0) is sixth on the list, Liverpool West Derby (63.0) is eighth, followed by Birkenhead (62.9) and Bootle (62.6).

West Aberdeenshire and Kincardine (24.1) was the constituency deemed best able to cope with cost of living crises out of all 650 in the UK.

Merseyside constituencies’ financial vulnerability scores:

1. Liverpool, Walton: 67.8 - (UK rank: 1)
2. Knowsley: 64.0 - (6)
3. Liverpool, West Derby: 63.0 - (8)
4. Birkenhead: 62.9 - (9)
5. Bootle: 62.6 - (10)
6. Liverpool, Wavertree: 59.6 - (32)
7. Wallasey: 58.0 - (49)
8. Garston and Halewood: 57.7 - (54)
9. St Helens South and Whiston: 57.6 - (58)
10. St Helens North: 55.7 - (77)
11. Liverpool, Riverside: 53.7 - (114)
12. Southport: 50.3 - (178)
13. Wirral South 48.3 - (230)
14. Wirral West 48.0 - (242)
15. Sefton Central: 45.6 - (306)

What’s been said about the figures?

John Pears, UK CEO of Lowell, said: “Right now, everyone’s talking about the increased cost of living, but the impact won’t be the same everywhere.

“There are lots of communities that still aren’t back to how they were before the pandemic and they are being hit again.

“With rising energy and food prices, we hope that these areas get the support they need, or the Government run the risk of levelling down in some of our biggest cities.”