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Record Consumer Numbers Seek Debt Assistance

The debt charity Stepchange has revealed that it was helping one consumer with debt advice every 53 seconds during 2016.

 

This amounted to a record 600,000 people in the UK seeking advice for debt problems last year. A figure up 9 per cent from the 550,000 in 2015.

 

In addition, the average unsecured debt has increased from ?13,900 to ?14,251. This constitutes the first increase in average unsecured debt for eight years.

The debt charity has also seen an increase in the number of clients aged under 40, with this group now representing 60 per cent of people advised by the charity, up from 52 per cent in the last five years.

In fact, the highest increase in debt levels last year was seen in those under the age of 25, rising by 13 per cent. Those aged from 25-39 saw an increase of 6 per cent.

More people residing in rented accommodation are also applying for advice, now representing 78 per cent of the charity’s clients, compared with 61 per cent just 5 years ago. However, this is seen to be largely due to the rapid increase of the private rental sector.

StepChange has called on the government to introduce a scheme whereby consumers who seek advice for debt are given a period of 6 months to a year in which interest is frozen and enforcement action halted, to allow them time to sort things out.

Scotland already runs the Debt Arrangement Scheme (DAS) which has been found to benefit those with debt problems. A survey of those who?d used DAS found that 81% said it?s easier to repay debts, 78% said they were less stressed and can now sleep and 72% said their finances had stabilised.

Chief Executive of StepChange Debt Charity, Mike O?Connor, said: ‘Borrowing is growing at its fastest rate in 10 years and for the first time since the economic crisis of 2008, the level of problem debt we see is also rising. If this continues, the social cost of personal debt will increase even further.

‘This makes it all the more urgent that the Government commits to a ?breathing space? scheme that will help people who are struggling to get back on their feet. Breathing space is the missing piece of the puzzle when it comes to debt solutions and it already has widespread support.’

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