Debt problems hit new heightsCitizens Advice reports on crisis

11 September 2007

 

A woman's hand swipes her credit card through a till.

Enquiries to Citizens Advice Bureaux (CAB) in England and Wales about debt have hit a record high, according to the latest figures.

CAB said the figures confirm there is no let-up in the rising toll of casualties from the consumer credit boom and recent sharp increases in the cost of living, with mortgages, council tax and utilities more expensive for many people.

Debt enquiries at CAB offices rose by 20% in the last year and brought the total up to 1.7m in 2006-07 which is double the number of enquiries that were being reported 10 years ago.

It is now the number one issue advised on in bureaux, accounting for one in three of all enquiries, a total of 6,600 debt problems each day.

Store card debt

Credit card debt and problems with unsecured loans were the most prevalent, accounting for 40% of the CAB debt caseload.

One in four of all debt enquiries concerned credit and store cards. Enquiries about bankruptcy jumped by half again.

The figures also indicate that hundreds of thousands of people are struggling to meet their day-to-day living expenses. Gas and electricity debt problems shot up by a third, while council tax debt enquiries went up by a quarter, followed by telephone debt and problems with mortgages and secured loans.

Repayments

David Harker, CAB chief executive, said: ‘We still see widespread evidence of people being lent much more money than they can afford to pay back, with many companies actively marketing expensive credit and loans to people who are already struggling.

‘Lenders need to do much more to check that borrowers are really in a position to keep up repayments when they take out credit.’

CAB would like to see more creditors willing to negotiate with people in debt and work with it to help people manage their debt problems.

The new figures are published during Advice Week when CAB focuses on raising funds and recruiting staff. To volunteer call the volunteer hotline on 0845 1264264.