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Debt crisis: More middle classes seeking help
By Caroline Gammell
Last Updated: 11:21PM BST 18/05/2008 | Comments 2 | Have Your Say
The number of middle class families struggling to make ends meet has increased significantly, with debt advice agencies overwhelmed with pleas for help from households in affluent areas of the country.
The rise in financial problems among the professional classes, disclosed by two leading debt advice agencies on Sunday, is being driven by rising inflation, the increased cost of living and the downturn in the housing market.
Transact, a national forum which represents more than 1,000 organisations advising on financial hardship, said that some of its members had been forced to close their books because they were so swamped.
In Congleton, Cheshire, the local advice centre had 32 listed clients and an average of three new cases a week at Christmas. Four months on, it has seen a five fold increase with 135 clients battling to pay off a shared debt of £5.1 million.
Community Money Advice, a charity providing money advice centres across England and Wales, reported an 85 per cent increased in people seeking help in the 12 months up to December 2007.
In Tunbridge Wells, inquiries rose by 234 per cent, in Cambridge there was a rise of 55 per cent and in Horsham, Sussex, requests for help increased by 48 per cent.
In Haywards Heath, inquiries at the local advice centre increased by 100 per cent and after taking on more than 200 clients, the small volunteer-run office was forced to refuse new cases.
Jamie Elliott, co-ordinator of Transact, said: “The rise is huge because of the big increase in middle class debt.
“The face of debt has changed. Historically, is used to be mainly people on benefits and people in social housing who went to debt advice agencies.
“Since the credit crunch started, there has been a big increase in professionals and home-owners coming for help - you just didn’t see these people before at all.”
Heather Keats, director of Community Money Advice, added: “We are seeing a new type of client. Teachers, police and banking and service sector workers, many of them homeowners, are struggling with mortgages, secured loans, and credit card debts.”
Mr Elliott said there were countless examples of people on good incomes with high salaries in crippling debt.
He cited the case of a retired bank manager from Haywards Heath with a pension of £40,000 a year who has generated £100,000 of debt across 20 credit cards and loans.
A television producer earning £70,000 has acquired £51,500 of debt - £26,500 secured against his property and £16,500 of charging orders after defaulting on other loans - while an IT consultant on £28,500 has amassed £28,000 worth of debt and a county court judgement.
“The message is that people need to stop borrowing and start saving,” said Mr Elliott. “There needs to be a culture change and people need to live within their means.”
He predicted that the situation would only get worse and called for more funding for debt advice and financial education.
Amid the warnings - London, the south east and Wales suffered a 5.8 per cent increase in the cost of living in the last 12 months - the UK has started to change its attitude towards spending money, a survey found.
More than four in five people - 81 per cent - believe the credit crunch has influenced how they spend their money, while 44 per cent have reigned in their spending, according to a YouGov poll commissioned by investment firm Skandia.
A leading animal charity said people were getting in such financial difficulty that many were abandoning pets to cut costs.
Vanessa Eden, who works at the RSPCA’s largest animal rescue centre in Fareham, Hampshire, said: “It’s sad that current economic problems are having a knock-on effect on the animals.
“We have had more people bringing in their pets because they can no longer afford to pay their energy bills, let alone vet bills or pet food. When faced with a rising cost of living, pets seem like an easy way to cut back."
Have your say:
By Caroline Gammell
Last Updated: 11:21PM BST 18/05/2008 | Comments 2 | Have Your Say
The number of middle class families struggling to make ends meet has increased significantly, with debt advice agencies overwhelmed with pleas for help from households in affluent areas of the country.
The rise in financial problems among the professional classes, disclosed by two leading debt advice agencies on Sunday, is being driven by rising inflation, the increased cost of living and the downturn in the housing market.
Transact, a national forum which represents more than 1,000 organisations advising on financial hardship, said that some of its members had been forced to close their books because they were so swamped.
In Congleton, Cheshire, the local advice centre had 32 listed clients and an average of three new cases a week at Christmas. Four months on, it has seen a five fold increase with 135 clients battling to pay off a shared debt of £5.1 million.
Community Money Advice, a charity providing money advice centres across England and Wales, reported an 85 per cent increased in people seeking help in the 12 months up to December 2007.
In Tunbridge Wells, inquiries rose by 234 per cent, in Cambridge there was a rise of 55 per cent and in Horsham, Sussex, requests for help increased by 48 per cent.
In Haywards Heath, inquiries at the local advice centre increased by 100 per cent and after taking on more than 200 clients, the small volunteer-run office was forced to refuse new cases.
Jamie Elliott, co-ordinator of Transact, said: “The rise is huge because of the big increase in middle class debt.
“The face of debt has changed. Historically, is used to be mainly people on benefits and people in social housing who went to debt advice agencies.
“Since the credit crunch started, there has been a big increase in professionals and home-owners coming for help - you just didn’t see these people before at all.”
Heather Keats, director of Community Money Advice, added: “We are seeing a new type of client. Teachers, police and banking and service sector workers, many of them homeowners, are struggling with mortgages, secured loans, and credit card debts.”
Mr Elliott said there were countless examples of people on good incomes with high salaries in crippling debt.
He cited the case of a retired bank manager from Haywards Heath with a pension of £40,000 a year who has generated £100,000 of debt across 20 credit cards and loans.
A television producer earning £70,000 has acquired £51,500 of debt - £26,500 secured against his property and £16,500 of charging orders after defaulting on other loans - while an IT consultant on £28,500 has amassed £28,000 worth of debt and a county court judgement.
“The message is that people need to stop borrowing and start saving,” said Mr Elliott. “There needs to be a culture change and people need to live within their means.”
He predicted that the situation would only get worse and called for more funding for debt advice and financial education.
Amid the warnings - London, the south east and Wales suffered a 5.8 per cent increase in the cost of living in the last 12 months - the UK has started to change its attitude towards spending money, a survey found.
More than four in five people - 81 per cent - believe the credit crunch has influenced how they spend their money, while 44 per cent have reigned in their spending, according to a YouGov poll commissioned by investment firm Skandia.
A leading animal charity said people were getting in such financial difficulty that many were abandoning pets to cut costs.
Vanessa Eden, who works at the RSPCA’s largest animal rescue centre in Fareham, Hampshire, said: “It’s sad that current economic problems are having a knock-on effect on the animals.
“We have had more people bringing in their pets because they can no longer afford to pay their energy bills, let alone vet bills or pet food. When faced with a rising cost of living, pets seem like an easy way to cut back."
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