Redundancy doubles the number of calls to Citizens Advice
The number of redundancy inquiries handled by Citizens Advice doubled between April and November last year, and the number of debt enquiries has doubled over the past decade, the charity announced today.
Citizens Advice said its advisers were dealing with an average of 7,241 new debt problems every day, while an increase in job losses had seen inquiries over redundancy soar.
On average, people who came to Citizens Advice seeking help last year were £16,971 in debt. One in 10 clients had at least 10 credit debts and owed money on credit cards, overdrafts, personal loans and hire purchase plans.
More than 50% had debts on household bills and 45% had arrears on mortgages or secured loans, with one in three spending at least half their monthly income on their mortgage.
David Harker, chief executive of Citizens Advice, said: “We have seen an enormous rise in the number of people turning to us for help because they have lost their job, and we can expect to see many more people struggling with severe debt problems as the recession continues.”
Citizens Advice said it hoped to improve its ability to cope with demand following a £10m funding boost. More than 300 Citizens Advice centres in England and Wales are extending their opening hours from now until March 2010 to assist an estimated 600,000 extra clients.
Harker said: “For many, there is little prospect of their income increasing or their circumstances changing. The reality is that they are condemned to a lifetime of poverty overshadowed by an inescapable burden of unpayable debt.”
Staff shortfall
The figures follow the results of a survey which show that advisers at debt counselling charities are struggling to keep up with demand as the recession takes its toll and the number of people asking for help and financial guidance soars.
Nearly 85% of advisers, working for charities including Age Concern and Citizens Advice, said they had seen an increase in the number of people coming to them in financial difficulty in the past six months, and almost a third said they were unable to help because there is simply not enough staff or because they do not know what sort of support they can give. Redundancy was named as the main reason for people turning to debt counselling charities for support, with 90% of advisers saying job losses had caused their client lists and case loads to grow.
The advisers and counsellors were responding to a survey published at the start of the year in Adviser magazine, a publication for professionals working in this field, which covers subjects such as housing, benefits, employment and consumer and money advice.
The results of the survey were released by Turn2us, a charity that helps people access welfare benefits and find out about which grants they are entitled to.
Jolanta Lasota, chief executive of Turn2us, said: “As the level of need continues to rise in the current climate, it is crucial that advisers have support – otherwise people will fall through the gaps.”
Those struggling with unmanageable debt will have a new route to take later this year. Debt relief orders – an alternative to bankruptcy – are expected to come into force from 6 April to help people in debt. Those who are not homeowners and have debts of less than £15,000, assets of less than £300 and a surplus monthly income of £50 after essential expenditure will be able to apply for a debt relief order for a one-off flat fee of £90. This will discharge them of their debts within a year.
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