Ipswich: Payday loans and soaring living costs have left families £4m in debt

Soaring living costs are crippling family finances

Soaring living costs are crippling family finances - Credit: PA

A CREDIT crisis crippling people across Ipswich and Felixstowe has seen personal debt spiral to nearly £5million last year, a charity has warned.

The town’s Citizen’s Advice Bureaus (CAB) said a combination of mounting credit cards, spiralling pay day loans and housing bills has resulted in more people desperate for help.

Ipswich CAB’s deputy manager Nelleke van Helfteren said she fears the problem will get worse as the impact of changes to people’s benefits starts to bite.

Last year specialist advisors at Ipswich CAB helped 311 clients facing a total of £3,748,097 debt – an average of £12,052 each.

Of that £3,148,921 was classed as credit debt – the result of people taking out credit cards and applying for pay day loans for example.

While the remaining £599,175 was made up of mortgage arrears, rent and utilities bills.

Meanwhile in 2012/13 advisors at Felixstowe CAB helped 82 clients facing a total of £841,436.12 debt – an average of £10,261.42 each.

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Of that £750,663.51 was credit debt.

Ms van Helfteren said they had to employ more advisors to cope with a surge in demand.

During the previous year (2011/12) the team helped 104 clients facing £1,709,369 debt – credit debt totalling £1,305,528 and housing costs of £403, 841.

She said: “We are seeing a rise in the number of people needing help with debt.

“There are huge issues with pay day loans, people see them as a quick way out.

“They are seen as a solution but people are using them inappropriately.

“Pay day loans are there to tied you over until your next pay cheque. But the interest is extraordinary.

“They being used by people even though they know they can’t pay them off, to cover everyday expenses.

“The cost of everything is going up, food, bills, fuel and travel while wages have stayed very static.

“And the changes to benefits is going to really impact on people.Suddenly people are finding they have to pay for things that they haven’t had to consider. It is yet another amount of money to find.

“We offer a lot of support to people to help them cope, budget and work out their priorities.”

Echoing the picture in Ipswich, Jane London, deputy manager at Felixstowe CAB added: “The demand for assistance with debt has shown a steady increase over the last several years,

“Pay day loans have become a significant problem; we believe that client’s ability to repay such loans is not checked carefully and so irresponsible lending occurs, forcing clients deeper into debt.”

– To seek help call Ipswich CAB on 01473 219777 or Felixstowe CAB on 01394 275958.