3.2 million households in the UK are in debt ~ Debt Managements and Consolidation

More than three million households across Britain are suffering financial difficulty while another three million are financially vulnerable.

Research, conducted by debt charity the Consumer Credit Counselling Service, reveals that 3.2 million households are either in debt action such as insolvency or are three months or more behind with debt repayments.This figure may be set to rise, however, as the proposed increase to electricity and gas prices will potentially affect the three million financially vulnerable households. Electricity prices will go up by 14.5 per cent, whilst gas will increase by 19.7 per cent.Any increase in monthly outgoings for these financially stretched homes, which are only just managing to meet existing repayments, would result in them also being categorised as being in financial difficulty.The chairman of the CCCS, Lord Stevenson, said: “These figures confirm our fears – that troubled times lie ahead for many people in the UK. This report shows the pain is going to spread wider and affect many more people than many commentators have previously assumed.”The CCCS’s report on debt and household incomes shows the difficult financial situation faced by around one tenth of the UK population, and includes more than a million people struggling to pay their mortgage.More than one third of the CCCS’s clients earning £13,500 to £25,000, and a quarter of clients earning £25,000 to £50,000, have no surplus money to repay unsecured loans and debts, the report revealed.Clients earning less than £13,500 per year were likely to have unsecured debts worth more than 20 per cent more than their yearly income. Clients who earned between £25,000 and £50,000 per annum had average debts worth 95 per cent of their annual income, whilst those who received benefits had the greatest levels of unsecured debts, worth 124 per cent of their yearly income.“CCCS was contacted by almost 418,000 people last year, and our data reveals the stark realities faced by many decent, ordinary people who struggle to make ends meet in these difficult economic times. “It is important that the complexities of their vulnerability are understood and addressed by government as well as the financial and charitable sectors,” Lord Stevenson continued.
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