Spiralling living costs cripple debtors on the poverty line
Wednesday, April 23rd 2008
Utility bill payments taking up a higher proportion of income
Rising household costs and utility bills are dragging debtors under, two debt charities said last month.
In its annual statement yearbook the Consumer Credit Counselling Server said clients living below the poverty line paid 23 per cent more for utilities in 2007 than four years earlier and suggested that many may be cutting back on fuel use to meet their financial commitments.
Meanwhile, Citizens Advice reported a significant rise in the number of people seeking help for serious debt problems in the first two months of 2008.
Bureaux in England and Wales saw mortgage arrears problems rise by 35 per cent in January and February compared with the same period in 2007. The figures also reveal continuing increase in problems relating to essentials such as gas, electricity, water, telephone and council tax debts.
Jan Smith, CCCS head of external affairs, said: "Housing and utilities are taking up more and more of the budget. People below the poverty line are cutting down on motoring and insurances – which is worrying as it makes them even more vulnerable."
Teresa Perchard, director of policy for Citizens Advice said: "The combination of big increases in household bills, especially fuel, and rising household costs is putting additional pressure on people`s finances when they are already stretched to the limit."
CCCS said debt levels are dropping for the under 25s – With the average debt now £9,656, down from £15,079 in 2005. The over 60s have the highest levels of debt.
