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Debt charity says more than 600,000 people sought help last year – – Free Debt Help Scotland

StepChange says there has been a surge in recent years in single parents seeking advice

Most people (80%) contacting the charity were tenants, even though only a third of UK households rent. More than a fifth (21.5%) of new clients were single parents with children, though only 6% of UK households are single-parent families.

The average couple with children owed £16,834 last year, while single parents had unsecured debts of £10,033.

Unemployment was the most common reason why people were in financial difficulty, cited by 18.7%, followed by injury or illness (16.4%) and lack of budgeting (14.3%).

About two-fifths of people have fallen behind on at least one of their priority household bills when they contact the charity, typically on council tax.

Borrowing on credit cards remains the most common debt, with more than two-thirds of new clients having accumulated credit card debts. Other borrowings included store cards, overdrafts, personal loans, doorstep and payday loans.

While debt problems are spread all across the UK, the highest concentrations of people in difficulty are in the north-east and London.

StepChange also found that one in five new clients struggling with debt problems has a physical or mental health condition, and tend to be older.

Phil Andrew, the chief executive of StepChange, said: “It is both striking and shocking that last year about one in every 100 UK adults contacted StepChange alone for debt advice.

“Our clients show that the debt problem is far from solved. With the prospect of higher interest rates ahead, it would be a mistake to take too much reassurance from the gradual improvement in the wider economy.”

He said the charity was working with the government to hammer out the details of a new scheme to help people get their debt problems under control. The new regulations are likely to be implemented in January 2020.

At the moment, people in England and Wales can only get a guarantee of protection from extra fees, interest and debt collection activities by entering into one of the existing statutory insolvency schemes. StepChange says this is not a suitable option for people in temporary financial difficulties.

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