Debt levels soar in Suffolk
PERSONAL debt levels in parts of Suffolk have risen to “epidemic” levels because of poor financial education and easily available credit.Advisors at the Citizens Advice Bureau (CAB) in Bury St Edmunds are now calling for credit to be more strictly controlled to combat the growing problem in the area.
PERSONAL debt levels in parts of Suffolk have risen to “epidemic” levels because of poor financial education and easily available credit.
Advisors at the Citizens Advice Bureau (CAB) in Bury St Edmunds are now calling for credit to be more strictly controlled to combat the growing problem in the area.
They were also highly critical of consolidation debt services, which they blame for putting already struggling borrowers into further difficulties.
Jane Ballard, manager of the Bury CAB, said the new personal debt of their clients in the St Edmundsbury district had increased by £1million in two years.
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“Two years ago we advised people with £1.75 million of new personal debt,” she said. “Last year it was £2.25million and we are now on course for £2.75million.
“And these are just the people who come to us - the situation among the total population is probably worse. The average level of debt has increased from £12,000 in 2002 to £17,000 in 2005.
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“Several factors are contributing towards this - people's expectations are increased of the amount of debt they can service and if goods are needed people will borrow to buy them immediately rather than save.
“There is also a lack of financial literacy out there - people don't compare interest rates and many don't understand their loans.”
However, the British Bankers Association defended consolidation loans as a sensible way of tackling debts and said that nationally lenders and borrowers were responsible.
A spokesman for the BBA, said: “The question we should be asking ourselves is do we want a society where credit is freely available or do we want to go back to the 70s when it was difficult to access credit.
“What we want is available credit but within certain parameters. Everyone should ask themselves whether they can afford it, do they understand what I am getting involved in and do they really need it.
“In the past I am not sure banks have done enough to highlight these points but work is being done to improve the situation.
“As far as consolidation loans go they are often very useful but if you are consolidating your debt on a credit card then it is a very expensive way of going about it. If you are in difficulty we would urge people to seek advice as soon as possible.”
The findings by the Bury CAB were reflected by Suffolk County Council's public protection committee, which this week looked at ways to tackle personal debt.
Chairman John Field chaired a meeting looking at ways to better co-ordinate a county-wide approach to the growing debt problem.
“The problem is like an epidemic - it is certainly a big problem,” he said. “We've been looking at ways at providing people in debt with better information and services.
“Anecdotal evidence suggests banks aren't doing enough to inform people but we want people to know where they can go for help.
“We want, along with our partners in the CAB and other bodies, to advise people on the best way to maximise their income.”