CCCS Reports UK Debt Problems Are On The Up

Posted on: March, 15, 2011
Categories: Articles, Debt Advice,

According to a UK charity CCCS, job losses and reduced income from work in the UK is leaving more households struggling to pay their debts, with the UK debt problems only looking to increase over the months ahead.

The Consumer Credit Counselling Service (CCCS) reports that the majority of households are faced with either falling incomes or incomes remaining fixed and the cost of living is increasing rapidly and those suffering with high levels of debt are on the edge of financial ruin.

The charity has warned that families were particularly vulnerable, with those that have dependent children needing an additional £650 a month just to cover everyday living costs compared to those without.

Families with more than three children faced an average £45 per month shortfall in money that they need simply to make ends meet.

The charity went on to say that “Changes in higher rate tax thresholds and the lowering of eligibility for tax credits is likely to spread the pain to middle income families, many of whom will also be hit hard as interest rates start to increase.

Around 55% of people who contacted the group last year said that they received some type of benefit or tax credit, with these accounting for a third of their household income.

CCCS also revealed that on average a homeowner has over £30,000 in unsecured debt on top of their mortgage. It warned that a 2% rise in interest rates would lead to a £307 increase in monthly mortgage payments for clients across the country.

CCCS chairman Lord Stevenson said: “The picture is undoubtedly bleak and it seems likely that many more families, including better-off ones, will be increasingly prone to over-indebtedness in the months ahead.

“It is also not a uniform picture across the country: public sector cuts in terms of jobs, spending and benefits will weigh disproportionately on certain groups of people.”

Last year CCCS dealt with 418,000 enquiries to help people with their UK debt problems. Around 55% of clients cited job loss or income as a reason for their debts, while a third lacked the means to cover basic living costs.

Help for people is available from many organisations within the UK, the Debt Advisory Helpline provides access to confidential free debt advise and you will find a free debt calculator on their website, which helps to itemise your financial situation in a budget format and identifies if you need to seek the help of a UK Debt Counsellor.

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