Record Debt Enquires Made As More Brits Struggle With Basic Living Costs

Tue, 16 Mar 2010

A record number of Britons sought help from one of the UK’s largest debt counselling charities last year, with an increasing number of people finding it harder to repay smaller amounts of debt .

The Consumer Credit Counselling Service (CCCS) said its helpline received 335,323 calls during 2009, a quarter more than the previous year, while some 150,000 people asked for help online – an increase of almost two-thirds from 2008.

However, three quarters of the people who contacted the debt charity for help did not have enough income to repay their debts by entering into an Individual Voluntary Arrangement or a debt repayment plan .

Furthermore, the CCCS found that a worrying number of these did not even have the funds to meet their daily living costs.

Overall, nearly one in three people who approached the charity had neither the budget for a repayment plan, nor qualified for any kind of insolvency, such as bankruptcy, and could therefore not be helped by the charity.

The CCCS said that many Brits are struggling to cope with lower amounts of debt either because they have been made redundant, had their work hours or salaries cut, or have been unable to access credit .

The annual figures come as the government announces new help for those with debt problems .

Under the first initiative, a new CCCS-managed payment arrangement will be launched for struggling borrowers with at least two unsecured debts, who are unable to meet their debt repayments, allowing them to make monthly token payments of as little as £1 per debt for up to six months.

The second initiative will see some lenders considering freezing repayments or reducing the interest rates on debts for those who suffer a reduced income, and will also accept token payments where appropriate.
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