Colchester: Shocking figures show level of debt

HARD-UP families in Colchester face being forced even further into debt as a result of Government welfare changes and increasing rent prices.

New figures released by debt charity Consumer Credit Counselling Service (CCCS) show that in 2011 nearly 700 people in the town called them for advice concerning an average unsecured debt of �18,821.

With the introduction next year of a single universal credit to replace a number of separate benefits, which includes housing benefit, the number of people being forced to take out payday loans to afford their basic living expenses looks set to rise.

Liberal Democrat MP for Colchester Sir Bob Russell is opposed to the welfare changes and said: “I think that the coalition Government has got this wrong and there is a real concern it could put people who are already disadvantaged at a further disadvantage.”

When quoted the number of people who had called the charity from Colchester, he said he was surprised the number was that low.

He added: “It is important to encourage people to go to the Colchester Credit Union if they are in trouble, and they should not use loan sharks or payday loans.”

With Colchester Borough Council currently undertaking a review of housing allocation, the town is bracing itself for the impact of the cuts.

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Thousands of people will be affected by the reduction in housing benefit and housing options manager at Colchester Council Diane Foley said that there is currently a struggle for private rented properties.

She said: “In Colchester there is a really high rental market. A lot of people who work in London and commute can often afford to pay higher rents and this means that landlords do not need to reduce rents to keep them low.

“With the welfare cap coming into place in April, there are people who are going to lose a lot of money and at the moment we are trying to identify those people and help them.

“People need to have enough options so that they can maximise their income.”

As rents increase and wages fail to keep up people are frequently finding that they are unable to pay their rent.

Nationally CCCS was contacted by more than 10,000 people last year who were having trouble keeping up with their rent payments, which was an increase of 27% on the previous year.

The policy officer of the Shelter Housing and Homelessness charity, Robbie de Santos said that for lots of people, renting from private landlords is now becoming the only option, despite the increasing rates, and that this trend will probably increase.

He said: “Renting a two-bed home in Colchester would cost an average of 36% of people’s pay and we believe people shouldn’t have to pay over a third of their income.”

Mr de Santos added that with rents going up and wages falling, it is hard to see how the trend of people taking out payday loans will be reversed.

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