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Citizens Advice sees a "significant" increase in UK debt related problems

A survey undertaken by Citizens Advice saw a significant increase in debt related problems in England and Wales in January. According to figures complied by the bureau, Citizens Advice dealt with 83,000 new debt related problems in January. The comparable figure for January 2006 was 72,000.

Although the bureau were still advising a significant number of people in England and Wales in the traditional areas prone to debt related problems, such as those citizens who had created debt problems due to misuse of their credit cards and those who applied for loans and mortgages that they were finding difficult to repay, the bureau also reported that it was now advising an increasing larger group of citizens who were encountering debt problems merely trying to meet their basic day-to-day obligations, such as their utility and telephone bills and the recent council tax bills.

Nevertheless, debt related problems due to misuse of credit, store and charge cards still accounted for the majority of cases on which the bureau were asked to assist. 25 percent of those who sought help from Citizens Advice could trace their debt related problems back to misuse of a credit, store or charge card.

During this period the bureau also saw a 15 percent increase in those it advised who said their debt related problems could be traced back to overspending on their overdraft facility.

Commenting on the latest figures, Teresa Perchard, director of policy at Citizens Advice, said that the figures showed the number of areas were people need debt related advice was continuing to increase. Perchard commented that: "The combination of people experiencing increases in fuel bills and rising housing costs puts additional pressure on people’s finances which were already stretched to the limit."

In a separate study, the charity Consumer Credit Counselling Service (CCCS) confirmed that it had advised 50,472 people during the period from June to December 2006, a 66 percent increase in the number of people it was advising with debt related problems from the same period the year before (30,450). In part CCCS said this was due to the expanding services of the charity. However, the charity also highlighted single people in the UK as now being the most vulnerable to debt related problems.

Perchard concluded that Citizens Advice were advising that if people in the UK were having problems meeting their debt repayments, they should seek help about their financial situation immediately.

Richard Smith
20th February 2007


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