More people ask for debt advice

18 March 2008

Citizens Advice see increase in people seeking help

A recent survey of over 300 Citizen Advice offices, collected for the BBC, has shown that increasing numbers of people are worrying about their mortgages and bills for ‘basic essentials.’

The survey found that the number of people going to Citizens Advice with mortgage queries in January and February was 35% higher than the same time last year.

The increases seen recently in the cost of household bills, such as gas and electricity, water, telephone and council tax, have also resulted in 215,000 new debt problems being addressed to the service in January and February.

However, the number of queries made regarding credit card debt problems has decreased by 9%.

The big debt problem

The biggest issue tackled by the Citizens Advice bureaux (CAB) in 2006-7 was debt with almost a third of their 5.7m queries involving the issue.

The new survey comes after warnings from the Council of Mortgage Lenders (CML) that predicted an increase in the number of houses being repossessed in 2008 as a result of the credit crunch and a 21% rise in 2007.

Teresa Perchard, director of policy at Citizens Advice, said: “It is a worrying trend that our bureaux are reporting a very sharp increase in the number of mortgage arrears problems they are dealing with.

“These latest figures paint a worrying picture, suggesting a significant number of households are struggling to meet their most basic living costs.

“The combination of big increases in household bills, especially fuel, and rising housing costs is putting additional pressure on people’s finances when they are already stretched to the limit.”

Credit card explosion prevented

Credit card debt fell by 9% in the first two months of the year according to the CAB. This trend was mirrored by figures from the credit reference agency Experian who claimed that the decrease was because lenders had tightened their lending criteria before the start of the credit crunch last summer.

This prevented an ‘explosion’ in the use of credit cards.

Experian said, however, that this decrease was also attributable to the fact that householders had heeded warnings not to get into too much debt by putting everything on their plastic.

“The flat, almost negligible growth in credit card balances suggests that consumers themselves have also taken a much more responsible approach to borrowing,” Experian’s report said.

Get help

The CAB advised those people in debt to speak out before the debt spiralled out of control.

“If people have debt problems they should get help straightaway. We cannot stress enough the importance of telling your creditors as soon as you have difficulties in paying – they should treat you sympathetically,” said Teresa Perchard.

If you are having problems with your debt visit the Citizens Advice website or pop into your local bureaux.

Use our letter templates to inform creditors if you are having financial difficulties.