Personal debt reaches record levels

Monday, 4 June, 2007

PERSONAL debt in Suffolk is higher than ever before - and the numbers of homes being repossessed has more than doubled in the last ten years.

Financial advisors around the county are being inundated with pleas for help from debt-strapped residents who are increasingly relying on credit to fund their lifestyles.

One expert told the EADT that there had been a 'huge increase' in personal debt, while another described the figures as 'shocking.'

The Citizens Advice Bureau (CAB) in the East of England dealt with 212,300 debt problems in 2005/06 - the most recent figures available - with the average total household debt soaring over £13,000.

It comes as the number of mortgage possession orders made in Suffolk between 1997 and 2007 has rocketed by 109% - from 219 to 458.

David Ruffley, MP for Bury St Edmunds and Stowmarket, said of the repossession statistics: 'These new House of Commons figures make worrying reading for Suffolk's homeowners.

'The colossal increase in house prices since 1997, alongside unparalleled levels of personal debt, have clearly had a disastrous impact on the lives of many Suffolk residents.'

Mr Ruffley's comments were echoed by CAB bosses around the county, all of whom expressed grave concerns about the ever-rising level of debt in the region.

Ian Burnett, manager of Ipswich CAB, said that in 2005/06 his team dealt offered advice to clients struggling with some £6.5m of debts - with an average family owing around £50,000.

'It's been building and building as credit gets easier and easier to get,' he said. 'People are stretching themselves more and more, particularly in relation to the housing market.

'They stretch themselves in order to buy the house and then in order to live they may have to at some point rely on credit cards - and sometimes it can go horribly wrong.

'No longer do you have to go out and seek the loan or credit card - now they come through your letter box and just say 'sign here'.'

Mr Burnett also bemoaned the lack of financial literacy in society, and said more should be done to teach people of all ages about finance.

Elsewhere, the Leiston, Saxmundham and District CAB has seen the debts it is dealing with leap by around £350,000 in the last year, while experts at the Sudbury branch estimated they have to turn away 5,000 potential clients a year.

Nick Mayo , manager at the Leiston branch, said: 'It's really quite alarming and we only see the tip of the iceberg because there are so many more people out there in debt who do not come to us.'

Ann Furlonger , CAB centre manager at Sudbury added: 'The figure is quite shocking but sadly it is just a drop in the ocean to what is actually happening in Sudbury and the surrounding area.

'Everyday we have new people come to us with debt problems - we even have people just turn up with carrier bags full of opened and unopened envelopes of bills asking for help.'

And Jane Ballard, manager of the Bury St Edmunds CAB, said the debts that they were dealing with had jumped from £2.3m to £3.1m in the last year.

'It's definitely fair to say that we're seeing more people in debt than ever before.

'People are being bombarded with credit offers all the time - every shop you go into will offer you credit and you have to be very strong to resist that.

'There's lots of health links with debt, particularly with anxiety and depression - you can end up in a spiral.

'As soon as people think they're getting into difficulty they must seek advice immediately - rather than wait for something dire to happen.'