Record numbers of people are turning to the charity Citizens Advice Bureau for help with recession-linked problems of job loss and debt.
New figures show Citizens Advice Bureaux in England and Wales are now dealing with 9,300 new debt problems and 8,000 new benefit problems every working day.
Debt problems have increased by 27% in the three months to the end of June 2009 compared with the same period last year.
Debt is now the number one issue advised on in the bureau, accounting for one in three of all enquiries, and CAB advisers are currently dealing with an average of 7,241 new debt problems every working day.
In a previous report 'A life in debt' released in February of this year the charity stated that CAB debt clients owe an average of £16,971 - two thirds more than in 2001, and the equivalent of almost 18 times their total monthly household income. It will take them an average of 93 years to pay off the money they owe at a rate they can afford.
The most common reasons for debt were low income, over-commitment, illness or disability and job loss. But irresponsible lending, poor financial skills and big increases in the cost of living - especially on petrol, energy, water and council tax – had also played a significant part in people’s debt problems.
Citizens Advice Bureau has just celebrated its 70th birthday after starting life as an emergency war service. World War II was declared on 3 September 1939 and the first 200 bureaux opened their doors the very next day.
Of the 26,000 people who work in the service, 20,000 of them are volunteers, all from different backgrounds with different skills. They perform a variety of roles from giving advice to fundraising, IT, administration, publicity, local campaigning and trusteeship.
To find your nearest CAB office just click on the following link and enter your postcode Citizens Advice Bureau office locator.
DebtWizard comment
The CAB offers a valuable service but along with other debt charities they are overwhelmed with enquiries. The consumer debt problem in the UK is just too big to be left to those firms described as ‘charities’ to deal with. This has been recognised by the Government which is why the debt service industry in under review, more of this can be found here Government reviews the workings of Debt Management Companies.
Due to the current debt crisis in the UK the fee charging firms have seen a massive increase in demand for their services because the non fee charging firms, of which there are only a few, are often swamped and can take longer to set up these plans. Debtors need action sooner rather than later and many accept that they have to pay for such a service. There are pros and cons for using either of the fee charging or non fee charging firms.
You can find more on this at the DebtWizard guide to debt management companies.
We don't just have thousands of consumers in serious debt trouble, we have millions, and they are not going to suddenly disappear overnight. The reason for this is that over the past decade or so this country's economy has been fuelled by £1.5 trillion of consumer borrowing. Morally and socially we have been encouraged to spend and pay later through slick marketing and the easy availability of credit and from this we have developed a culture of 'must have now'.
There needs to be a long term agenda of teaching and educating individuals on how to manage their finances with the aim of getting them to live within their means. We also need to have a look at the way credit is advertised and bring in legalisation to seriously penalise those that are found guilty of irresponsible lending.
We have some useful links below;
DIY Debt plan
Free BudgetWizard
Helpful organisations
Six option guide to debt problems
Debt solution comparison table
