Record numbers of debtors are contacting Citizens' Advice Bureaux throughout the country, with a quarter of households reporting they have been in financial difficulties in the last 12 months, according to the Department of Trade and Industry.
The figures highlighting the growth in debt problems coincide with the forthcoming publication of the Child Poverty Action Group's Debt Advice Handbook.
Consumer debt problems handled by Citizens Advice Bureaux have increased by 46% over the last five years and CAB advisers have taken on more than a million new debt cases. Indications are that the number seeking debt advice is still rising.
But research suggests that many people only seek help with debt as a last resort, often when they are already deep in crisis. In a survey of over 900 CAB debt clients more than half were using credit or taking on further borrowing to cope with their debt problem. A quarter were receiving treatment for stress, anxiety and depression.
CPAG director Martin Barnes says: “Today's credit can all too easily become tomorrow's debt. It is right to be cautious and concerned about the seemingly unstoppable rise in borrowing and credit fuelled spending. Many families are only a couple of pay packets away from being unable to meet repayments on credit cards, loans or mortgages. Poverty can cause debt, but the burden of debt can drive people into poverty.”
David Harker, chief executive of the National Association of Citizens Advice Bureaux, says: “The worrying findings of the DTI research and our own debt enquiry figures confirm the pressing need for continued monitoring and for access to free, independent debt advice.
“We make no apology for drawing attention to the downside of the apparently inexorable growth in the market for credit, because Citizens Advice Bureaux see the distress that debt problems bring: the sleepless nights, the bailiffs at the door, the pressure on family relationships.”