New research published today, 26 February 2009, points to a deepening debt crisis in which many people turning to Citizens Advice Bureaux for help have no realistic hope of paying off their debts in their lifetime.

The report 'A life in debt' reveals 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.

Citizens Advice Bureaux have seen debt enquiries double in the last ten years. Debt is now the number one issue advised on in bureaux, 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.

One in ten had at least 10 credit debts - credit cards, overdrafts, personal loans and HP - but well over half (58%) had no available income to pay these debts, a substantial increase from 2004.

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.

CAB debt clients tend to be poorer than the population at large, with an average net monthly household income of £1,021 - less than two-thirds the national average. The average spent on housekeeping per week was £69.50, far below the national weekly average of £142.

Source: www.citizensadvice.org.uk

DebtWizard Comment

Over the past decade 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 to teach and educate 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. Now that is a lot of people.

Useful links below;

Six option guide to getting out of debt

Comparison table for different solutions to debt problems