Debt charities urge struggling consumers to seek advice early

Citizens Advice and National Debtline say January will be busiest for years as financial hangover, on top of rising bills, is felt.

Two debt charities are preparing for what they say will be one of their busiest months ever as cash-strapped consumers are forced to face up to pre-Christmas overspending, and more deep-seated financial problems.

Citizens Advice expects more than 370,000 people to seek help on a range of financial issues including post-Christmas debts over the next two months.

National Debtline, which took an average of 715 calls a day in December and helped more than 40,000 people online last month, said it expected January to be its busiest month in several years.
The charity, which particularly helps consumers with debt problems, said its latest research suggested 10% of Britons (5.5 million people) would fall behind with their finances in the next few weeks.

Citizens Advice, which has 2,900 offices nationwide dispensing free advice, expected someone to be viewing its online advice pages every three seconds in January.

Based on last year’s figures, Citizens Advice said demand for financial advice was likely to peak on 12 January.

Consumers who have overspent in the run-up to Christmas often struggle from mid-January onwards as already stretched overdrafts reach breaking point, and credit card bills start arriving.
This year’s financial hangover is set against a backdrop of steadily rising personal debt, and recently rising household bills. Credit card debt hit a record high of £66.2bn in October and overall unsecured lending has jumped 10.5% in the past year, to a rate not seen since 2005.

Comparethemarket said on Monday that household bills rose by almost £200 in 2016. Analysis of costs across energy, motor and home insurance found that, after a £180 drop in 2015, bills rose by 9.7% from £2,032 in 2015 to £2,223 during last year.

Joanna Elson, chief executive of the Money Advice Trust, which runs National Debtline, said only 12% of the 2,000 adults surveyed recently by the charity had a plan as to how they would repay their debts.
“January can be a difficult month for household budgets – and it is easy to see how many people fall behind when the bills for Christmas spending begin to land,” said Elson. “I would urge anyone who is struggling to cope to seek free advice as early as possible – as the earlier you seek advice, the quicker and easier the problem will be to solve.”

Gillian Guy, chief executive of Citizens Advice, said: “Although debt worries can be more acute in January, people are also taking stock of their finances and thinking about the future. It doesn’t matter what your earn – whether you are on minimum wage or have a comfortable salary – everyone can benefit from reviewing their finances.”

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