Drowning in debt

Calls to a national debt helpline have doubled in the last year - find out why

The Consumer Credit Counselling Service is experiencing twice as many calls to its helpline as it was a year ago. Statistics show not only is number of people in debt increasing but the amount owed is also on the up.

The average unsecured debt is £34,500. The key age for debt is the 40-60 year old but they are also seeing a trend in older people with debt.

The Foundation for Credit Counselling, Britain's leading debt charity has published new statistics highlighting the spiraling debt problem.

Calls for help

It gathered together data derived from two million phone calls, 280,000 clients and a million debts totalling £1.5 billion, representing 0.78 percent of UK unsecured debt.

They found that uncontrollable debt, or over-indebtedness, is rising fastest among the over 40s, with particularly marked increases in the debts of those aged 60. The information is based on people experiencing financial difficulties who have contacted the Consumer Credit Counselling Service for help over the last three years. 

All the debt they were looking at was unsecured and included credit cards, store cards, personal loans, catalogue debt and doorstep lenders.

The key findings

• Clients aged between 40 and 59 not only have the highest levels of debt, an average of £34456, but their numbers are increasing at a faster rate than any other group
• Increases in the amounts of money owed is accelerating most rapidly among the over-60s, rising by 25 percent during 2005 to £33,568 compared with £29, 965 in 2004
• The average level of debt held by a client on a debt management plan increased five percent during 2005 to £30,763 from £29,340 in 2004
• Young clients (aged 18-24) owe an average of £15,079 - half the amount owed by the over 60s
• Extreme debt is worsening. The proportion of clients who owe more than £100,000 to their creditors increased to 2.7 percent from 1.4 percent in 2004
• Renters are more likely to have debt problems than buyers or owner-occupiers. 60 percent of clients live in rented accommodation.

In the red

Credit and store card debt is growing. Cards are all too easily available, often offering individuals credit limits way above their means.

More than half of consumers are worried about overspending and losing track of how much they owe.

Around 44% of people fear that they'll give in to temptation and use their credit card to buy things they can't really afford, while 12% fret about losing track of how much they've spent, according to financial services firm CPP Group.

With total consumer credit debt, excluding mortgages, reaching £168 billion and average consumer debt at more than £6,800 per household, the OFT is launching a major debt advice campaign.

Debt help

The Office of Fair Trading has useful advice for anyone facing a major debt problem:

• Don't panic or ignore the problem, it won't go away
• Seek impartial advice
• Contact those to whom you owe money - they may be able to help
• Keep copies of all letters you send and get about your debts
• Prioritise your debts - like mortgage or rent, or those which cost you most.

If you're seriously in debt, contact the Consumer Credit Counselling Service (CCCS), National Debtline, or The UK Insolvency Helpline via their websites or hotlines.

• CCCS - Freephone 0800 138 1111, Monday to Friday  8am-8pm 
• National Debtline - Freephone 0808 808 4000, Monday to Friday 9am-9pm, Saturday 9.30am-1pm
• The UK Insolvency Helpline – Freephone 0800 074 6918, 24 hours every day including bank holidays