Consumer debt levels rise

More and more people are failing to keep up with repayments on debt, according to a report out today.

The Consumer Credit Counselling Service (CCCS) has voiced its concerns about high levels of consumer debt, saying that the number of people who have fallen behind with payments on debt management programmes has been steadily increasing during the past year.

It blamed the rise on companies cutting back on workers' overtime, and warned that if unemployment were to rise or earnings growth slow further, even greater numbers of people could face problems servicing their debt.

The increase was particularly worrying at a time of relative economic stability, it said.

During the three months to September, 12.3% of people with debt management plans - under which interest on debts is frozen on condition that set monthly repayments are met - fell behind on their payments, according to the CCCS. A year ago, only 9.4% were failing to keep up.

The average amount owed by those on debt management plans is now ?24,000, up 5.6% since this time last year.

The charity has also seen a general increase in the number of people seeking help with financial problems.

Its warning comes a day after the Bank of England said that consumers' unsecured debt rose by more than ?2bn during September to nearly ?153bn.

Last week a report from mortgage lenders Kensington Mortgages revealed a culture of complacency among borrowers, two thirds of whom admitted that they would not worry about their debt until it was beyond their control.

CCCS chairman Malcolm Hurlston said: "With Christmas approaching it is important that people think carefully about their budget before embarking on a spending spree."

The charity has around 30,000 people on debt management plans, and receives around 150,000 phone calls a year from people with financial problems.