50 per cent of Hull people facing ‘downward spiral of debt’

November 28, 2013 No Comments

IT IS the unenviable crown Hull certainly did not want after the euphoria of landing UK City of Culture 2017 exactly a week earlier.

Hull was put in the spotlight again yesterday after being placed at the top of the debt league table.

A report by the Government- backed Money Advice Service (MAS) reveals 43 per cent of adults in the city are struggling to make ends meet.

As city leaders seek to promote cultural assets, debt charities report a surge in desperate families, many of whom have been pushed to the brink of bankruptcy, asking for help.

Anne-Marie Benson, projects manager at Hull and East Yorkshire Citizens’ Advice Bureau, says the type of clients coming to them with money worries has changed dramatically in the past few months.

She said: “We are now seeing older people come to us for help after they’ve taken out loans to help their struggling families. That’s not something we used to see.

“A lot of young people are asking for help. They’re moving into new housing, not fully realising the costs involved.

“Families are getting into debt as a result of losing their jobs or their hours being reduced.

“On top of this, many people are being hit by changes to the welfare state, including the introduction of the ‘bedroom tax’.”

Keith Wardale, manager of The Hull Families’ Project, warns soaring debt levels are having a catastrophic effect on family life in the city.

He said: “The fabric of family life is slowly being undone for those hardest hit by the economic downturn and the benefit changes taking place at the same time.

“The chance for recovery is slow, leading many to get into unwanted debt.”

Mr Wardale, whose organisation is based in north Hull – which has been labelled as one of the most-deprived areas in the country – says there has been a “considerable increase” in referrals.

“Many families are facing a downward spiral of debt, which is affecting those in low-paid and part-time work as well as on benefits and struggling to overcome their problems,” he said.

Earlier this month, rent arrears among council housing tenants in Hull topped the £2m mark for the first time.

According to the latest figures, 9,092 council tenants were in arrears with their rent at the start of November – 2,000 more than in March.

However, the full scale of the crisis is unlikely to ever be known, with the MAS report stating just one in six of the 8.8 million people said to be “over-indebted” in the UK seek help.

An unknown number are suffering in silence.

Researches use the term “over- indebted” to describe someone who has fallen at least three months behind with their bills in the past six months or who feels their debts are a heavy burden.

About two-fifths (40 per cent) of this group said they did not feel able to talk to their creditors and 44 per cent did not know where to turn for advice.

Caroline Rookes, chief executive of MAS, said it commissioned the report to better understand the lives of people with serious debt problems.

She said: “This is the first time we’ve had such a detailed understanding of the complexity of their lives.”

Three-quarters (75 per cent) of the estimated 8.8 million people with severe debt problems are under 45 years old and almost two-thirds (64 per cent) are women.

The report used information from credit checking company Experian to build a profile of those who have sunk badly into debt.

Families dependent on benefits made up about one fifth (20.2 per cent) of those who are over- indebted, while “worried” working families who find being in debt a constant burden accounted for a similar proportion (19.4 per cent).

At the other end of the spectrum, Richmond upon Thames in south London has just 1.2 per cent of its population struggling with debt, the report found.

*Source hulldailymail.co.uk*