Over half a million people (577,677) needed help to manage their debts last year, reports debt charity Stepchange. Who warn they have seen the number of people needing debt help increase by 56% since 2012.
The annual report from StepChange found that among those seeking debt help:
- The average individual debt was £14,650
- They were as likely to be in full-time work as unemployed (but those on benefits find it harder to remain out of debt)
- There is a “growing crisis” of people struggling to cover essentials; in 2014 gas and electricity bill arrears comprised 7.8 % of the average unsecured debt; those with council tax arrears has risen from 20% to nearly a third in just two years
- Over 50% of people with debt suffered some stress-related health issues
This report comes off the back of StepChange’s report last year, which found problem debt costs the UK economy £8.3billion a year.
Burying your head in the sand isn’t an option
Commenting on StepChange’s annual report, David Mann, Head of Money at uSwitch.com, says:
“Burying your head in the sand is also not an option. If you’re worried about debt, it’s important to take a good hard look at all outgoings and see what steps you can take to improve things, however small.
“But how can you take steps to manage your money if you don’t have the full picture? Without fairer and free access to credit reports in the UK, many consumers are left in the dark about what their financial situation really is and what can be done to improve it.
“For example, many may be paying over the odds for their existing debt but don’t know what better deals they could have access to.
“This is why uSwitch.com is calling for free access to credit reports, an explanation for those turned down for credit, and a standardised credit score with the “It’s my report” campaign.”
Steps you can take if you’re struggling
If you’re struggling with debts and feel you can’t cope the first step you should take is to seek independent financial advice. There are a number of debt help charities you can turn to like StepChange, who offer free advice.
Our debt help guides contain useful information about how to manage your debts and steps you can take to reduce your debts, as well as glossaries on key debt terminologies.
If you feel your debts are becoming unmanageable, you could consider consolidating them with a debt consolidation loan or balance transfer credit card, which can give you a reprieve from large monthly repayments and interest charges.
But remember, while consolidating your debts may give you cheaper repayments each month, it is likely to end up costing you more in the long term.
Help us fight for free access to standardised credit reports
Credit reports control your access to credit cards, mortgages, housing and jobs, but our research shows they’re poorly understood, difficult to get hold of, and cost money.
We believe that clear understanding of credit reports is key to putting consumers in control of their credit and will help in the struggle against problem debt.
That’s why we’re calling for free annual credit reports and scores, lenders to give a specific reason if you’re rejected because of your credit report and standardised credit scoring between the credit agencies.
Click the button below to learn more and sign our petition.