Advice sought as debt spirals

As many as 1.7 million individuals in England and Wales have sought advice in alleviating their debts in the previous 12 months.

According to new research released by Citizens Advice today the number of people seeking assistance has increased by some 20 per cent in the last year.

The number of people asking for assistance has doubled in the previous decade and the group now offer advice on 6,600 debt problems each day.

"These figures are worrying evidence that while many have enjoyed the benefits of the credit boom, a large and growing number of people continue to pay the price, becoming overwhelmed by serious debts that can have a devastating impact on their lives," commented Citizens Advice chief executive David Harker.

"Even more worrying are the signs that people are struggling not only to repay credit, but also to afford day-to-day essentials."

The spike in people seeking advice may have been spurred by recent increases in the cost of living, which has seen council tax and utility bills rise, explain the charity.

Rising mortgage repayments, prompted by recent increases in interest rates, have also caused problems for homeowners.

Up to 40 per cent of the calls the bureaux receive are related to credit cards and unsecured personal debt, making this one of the major areas of difficulty.

Concerns over mortgages and other secured loans also increased by 11 per cent over the last twelve months.

Enquiries about bankruptcy have jumped 50 per cent in the last year.

"We still see widespread evidence of people being lent much more money than they can afford to pay back, with many companies actively marketing expensive credit and loans to people who are already struggling.

"Lenders need to do much more to check that borrowers are really in a position to keep up repayments when they take out credit," concluded Mr Harker.