Unemployment and low incomes 'complicate debt problems'

09/09/2009

Debt problems in the UK are becoming more complicated because many people facing issues like mortgage arrears have also been hit by a drop in their income due to the recession, the Consumer Credit Counselling Service has warned.

A spokesperson for the organisation said that while figures from the Bank of England showing a £600 million drop in net lending during July are "good news", there are many people still in need of debt help in the UK.

In a lot of cases, these individuals are having difficulty getting on top of their obligations because they have seen their income decline either because of unemployment or having their working hours reduced as the economic downturn squeezes employers.

Research from the Trade Unions Congress indicates those in low paid jobs, such as high street shop workers and general office assistants, have been hardest hit by rising unemployment during the recession.

Between July 2008 and July 2009, the number of people claiming Jobseeker's Allowance rose by 700,000. Around 76,820 of these claims came from former shop workers, the union said.

However, a separate report from the British Retail Consortium has offered some hope to consumers facing money problems, as it indicates high street prices dropped for the first time in two years last month.

Retail prices dipped by 0.1 per cent in the 12 months to August, the trade association said.

Tags; Income Worries and Debt, Young Family Finances, Credit Card Lifestyle, Recent Graduate Debt,

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