May 24 2013 Latest news:
By Chris Harris
Saturday, January 12, 2013
INCREASING numbers of professionals are seeking help for debt problems amid uncertainty in the job market, it has been revealed.
Colchester’s Citizens’ Advice Bureau (CAB) says it has seen a “marked increase” in the number of highly-paid former City workers it is advising.
Richard Aldridge, bureau chief executive, said when redundancy strikes, their finances are a “house that falls very quickly”. He added: “We’re seeing a lot of professionals from the City who have substantial debts. It’s because of the jobs market – they are all caused by redundancy or firms going bust.
“A mortgage for them is going to cost £1,000 a-month, travel to the City is £400 a month. You can see that straight away even if you earn £50,000 you would struggle to have much cash, especially if you’ve a family and bills to pay. It’s a house that falls very quickly.
“We had a case where someone was earning a six-figure salary and got made redundant. They got another job on half that salary, but their outgoings were £1,000 a month more than their incomings. It’s a marked increase and we’re certainly not the first port of call because professionals have other sources of advice, for example an independent financial adviser.”
Mr Aldridge said those on low incomes were also falling prey to payday [small, short-term advances] loans with punitive interest rates.
It is a situation mirrored at Ipswich CAB, which said the number of people it was seeing with debt problems because of pay day loans had increased ten-fold in a year. Nelleke van Helfteren, the bureau’s deputy manager, said: “People tend to put their problems on hold to celebrate and then the pressure really hits in January. We tend to see a real breakdown with debt and deprivation.”
Ms van Helfteren said they were also advising people on relationship breakdowns.
She added: “People are coming in with family issues, looking for separation and looking for help with that.
“The crucial difference this year is the disappearing legal aid in April. Last year we had lawyers that we knew of that were taking legal aid clients – that is to say clients on a low income - for some family issues.
“This year in Ipswich I don’t think there’s any lawyers in Ipswich who are prepared to see clients on a low income because legal aid is not in place for them.”