Demand for debt help rockets

StepChange Debt Charity
by Lovemoney Staff StepChange Debt Charity on 04 February 2013  |  Comments 1 comment

We've never been so busy, with thousands looking for debt help. So what sort of people are looking for advice, and what sort of debts are they struggling with?

Demand for debt help rockets

At StepChange Debt Charity we’re currently experiencing our busiest time ever. It could be due to the recession, the fact that we’re advertising for the first time or the simple fact that it’s the start of the year.

Nobody wants to worry about their debts over Christmas and people often put off getting help over the festive period. However, we know from experience that when January comes we see demand for debt help go into rapid overdrive.

Batten down the hatches

For the past few years the third week in January has been our busiest time. This year was no different, and we’ve increased our profile by running an advertising campaign so that we can help more people with problem debt.

As our new infographic shows 5,863 people contacted us for debt help and support in the third week of January alone. This is a staggering number of people seeking debt help, both on the phones and online, in one week.

What do we know about these people, apart from the fact that they need debt help? Well, we could say that the typical person who contacted us that week was a woman in her early 20s who has been made redundant and as a result has problems with her credit card repayments.

The low down on debt demographics

Of course not many people who contact us actually fit that description. So let’s broaden it out…

  • The number of people we advised in this single week was up 21% from the same week in 2011. Unemployment or redundancy has consistently been the biggest reason given for debt problems.
  • Women have been more likely to seek debt help over the last few years and this trend has continued this year, with women representing 55.1% of the people who contacted us.
  • People of all ages contact us, but during our busiest week the biggest percentage of people seeking help fell into the 40-59 age bracket. Also, the percentage of under 25s needing help on our busiest week was on the rise.
  • Credit cards are still the biggest debt that people who contacted us have, but year on year we’re seeing a rise in both payday loan debt and catalogue debt. Problem payday loans have risen over 300%.
  • The number of people asking for free debt advice in the north west has risen 52% since 2011. This is a massive jump year on year.

A busy week, but a drop in the ocean

Helping 5,863 people in a week is well within our capacity; indeed we expect to help around 420,000 people this year in total. However the numbers don’t bode well in terms of the larger societal problem, especially with the changes in benefits likely to hit home in the spring and summer.

If you’re worried about your financial situation it’s always best to seek advice as early as possible, you can do this on our free helpline our online using our anonymous and free debt advice tool Debt Remedy.

More on debt:

The top three ways to deal with debt

How to spend less and have more

Where to get free debt advice

A 30% debt disaster

30% debt interest rate: what happened next

Enjoyed this? Show it some love

Twitter
General

Comments (1)

  • The Bank Manager
    Love rating 79
    The Bank Manager said

    What I would be very interested to know, would be whether a question is ever asked of a client, such as 'when you were earning, did you put money aside for a 'rainy day'? If so, what's happened to that money?

    In my role of Credit Management, I look after customers with problem debt and I am required to ensure they are aware of CAB, Step Change and National Debtline, as I am understandably biased in working for my organisation and they have a right to free impartial advice.

    It's just that when I ask them this question, many don't respond and I think this may be because of their approach to money and budgeting - earn it and spend it, because with inflation, its true value is eroded. Whatever happened to people saving to cover such awful situations where they are made redundant? I’m dealing with a case where one customer passed away without life cover and the other party has to sell their home and move in with family. How awful is this?

    It is not ideal to say this even at the time, as the ‘British reserve’ fails to allow us to talk about death, but even with hindsight being a wonderful thing, the first party was at fault for not thinking about their other half and considering the consequences what would happen? There’s a lot of bad press about mis-selling of insurance products, but to not have life cover written ‘in trust’ to enable the survivor to relinquish debt burden, is - in my opinion - very poor.

    I digress, however, it was always drilled into me by my parents (and I see this in the many financial blogs I read), to hold a minimum of 6 months salary in an instant access account, 'just in case'.

    If the country had just entered recession and economic downturn, I could understand the high volumes of people seeking help, but this has been an appalling economic period for 3 years+, so that has to say something about the attitudes of the population towards saving and budgeting...doesn't it?

    I'm proud to say that my colleagues and I are invited to run day courses in schools, both Junior & Senior (this may give away my age!!), although in the last year I've supported more Senior schools and spoken with Year 10-11 pupils, working with a team of colleagues to run workshops and budget days, making the whole subject of finance fun and not a case of simply totting up figures.

    This approach is - in my opinion - what customers want Bank staff to do. To serve the community and share our financial knowledge, not necessarily paint fences and build walls to get in the newspaper one week and be fish & chip paper the next.

    Report on 09 February 2013  |  Love thisLove  0 loves

Post a comment

Sign in or register to post a reply.

Our top deals

Credit card
company
Balance transfers rate and period Representative
APR
Apply
now

Barclaycard 31Mth Platinum Visa

0% for 31 months (2.99% fee) Representative 18.9% APR (variable) Apply
Representative example: Assumed borrowing of £1,200 for 1 year, at a Purchase Rate of 18.9% (variable), representative 18.9% APR (variable). Credit available subject to status. A Balance Transfer fee of 3.5% will be applied, then reduced to 2.99% by a refund (terms and conditions apply). Plus an additional £20 fee refund on balance transfers over £2000.

Barclaycard 30Mth Platinum Visa

0% for 30 months (2.89% fee) Representative 18.9% APR (variable) Apply
Representative example: Assumed borrowing of £1,200 for 1 year, at a Purchase Rate of 18.9% (variable), representative 18.9% APR (variable). Credit available subject to status. A Balance Transfer fee of 3.5% will be applied, then reduced to 2.89% by a refund (terms and conditions apply). Plus an additional £20 fee refund on balance transfers over £2000.

MBNA 30Mth Platinum Credit Card Visa

0% for 30 months (2.89% fee) Representative 18.9% APR (variable) Apply
Representative example: Assumed borrowing of £1,200 for 1 year, at a Purchase Rate of 18.9% (variable), representative 18.9% APR (variable). Credit available subject to status.
W3C  Thank you for using One Flew Over the Cuckoo's Nest