The CCCS reveal the status of debt in the UK

Each year the UK’s foremost debt advice charity, the Consumer Credit Counselling Service (CCCS), produces a statistical analysis of debt in the UK. The statistics are based upon the people that they have counselled during the course of the previous year. The 2010 statistics have recently been published.

The main crux of the research is that the average level of unsecured debt is on a decline, which has led to a reduction in the number of people seeking debt solutions such as a trust deed. There are other reasons for optimism too; the figures show that home repossessions are running at a level lower than previously expected.

There has been a significant decrease in both of these statistics. The average debt of an individual seeking advice from the CCCS in 2010 was £22,476, which is 7% lower than in 2009. The total number of people seeking advice from the CCCS also fell by a good margin, from 500,000 to 418,000.

However, looking at the overall statistics in isolation would hide the fact that certain groups of people are coming under greater pressure.

Families with children are reported by CCCS to experience costs which are £650 per month higher than those without. Families with three children on average have negative disposable income, leaving them with no scope to fund a debt solution such as a protected trust deed or a debt management plan. Inflation and the prospect of mortgage rate rises will be a concern for many families.

Homeowners have, on average, around twice as much unsecured debt as tenants. By the time they speak with a CCCS advisor they will have around £30,000 of unsecured debt. In particular homeowners tended to owe much more on credit cards than tenants. This may be a symptom of credit card use for mortgage repayments; some two million people are thought to have paid their mortgage or rent using a credit card in 2010. This group are facing the likely prospect of an increase in their mortgage costs when interest rates rise.

Debtors over the age of sixty seem to be at a higher risk of suffering at the hands of consumer price inflation. Their incomes are often fixed, and are typically £255 less than 40-59 year olds.

Although it is clearly good news that fewer people are struggling with debt, it does seem that certain groups, i.e. homeowners, families and older people are becoming increasingly susceptible to financial pressures.

If you are struggling with debt and are in need of assistance, contact us today. We can use our extensive trust deed knowledge to decide if that is the most appropriate debt solution for you, or whether there are other measures which may be far more suitable.

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