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The 10 million problem recession

2 December 2009

Citizens Advice urges people to avoid starting 2010 with a Christmas debt hangover

Top tips leaflets supported by Barclaycard to be distributed across the country

Statistics released from national charity Citizens Advice today (2 December) show that since the start of the recession (April 2008), Citizens Advice Bureaux across England and Wales have seen approaching 10 million problems presented by almost 3 million people Citizens Advice Bureaux saw 2.74 million people (counting each individual once no matter how many times they returned) with over 9.4 million problems between April 2008 and end of September 2009..

Citizens Advice key statistics from April 2008 – September 2009 show advisers have dealt with:

• 3.06 million debt problems during this time, making it the biggest area of advice
• 2.71 million benefits problems
• 844,000 employment problems and
• 633,000 housing problems

Debt and benefit problems are currently growing at an annual rate of 21% with employment problems up also 17% in the last year Annual change compares last four quarters (October 2008 – September 2009) with previous four quarters (October 2007 – September 2008).

Latest quarterly figures show that there are continuing significant rises in the numbers of problems seen in bureaux on mortgage and secured loan arrears and fuel debts, up by 28% and 38% respectively when comparing 1 July – 30 September 2009 with the same period last year.

All Citizens Advice Bureaux are currently distributing pocket sized leaflets across their local areas. These ten top tips guides are designed to help people manage their money at Christmas and head off the traditional increase in client numbers seen in January. Provision of these leaflets have been supported by Barclaycard.

The Citizens Advice service is currently using a £10m funding boost from the Government to extend its opening hours and ensure even more people can benefit from receiving free, independent and impartial advice. This has meant over 225,000 additional people have been able to receive advice since February 2009.

Citizens Advice Chief Executive David Harker said:

“Citizens Advice Bureaux across the country are seeing increasing numbers of people seeking help, with benefits and debt enquiries alone up over a fifth in the last year. Extra funding has meant bureaux have seen more clients, but for many the impact of the recession will be felt for a long time to come.

“Every community is experiencing a change in circumstances. These new statistics show how many people are struggling as a result of losing their job or a reduction in pay or hours, leading to difficulties managing loan repayments.

“Bureaux are responding to increased demand by extending their opening hours and rolling out initiatives such as the Christmas top tips leaflets, to encourage people to seek advice as early as possible.”

Amer Sajed, CEO of Barclaycard UK said:

“We’re supporting this campaign as we want people to enjoy Christmas without getting into financial difficulties. It’s all too easy to overspend, so we are encouraging people to decide how much they can afford and to seek advice as early as possible if they are getting into difficulties.”

Top money tips to avoid a debt hangover

• Plan early for Christmas
  Be realistic and budget accordingly. Work out how much you are going to spend on each person – and stick to it. Manage expectations as to what you or Santa can give.
• Don’t forget the everyday bill
  Remember that rent, the mortgage, utility bills, food bills and other existing debts stillhave to be paid – and the consequences can be severe if they’re not. Even though it’s Christmas, get your priorities right.
• Don’t bank on an overdraft
  If you do need more money, don’t just run up an overdraft without talking to your bank first – it will work out much more expensive.
• Keep things simple
  If you can afford to pay for your goods outright by cash, cheque, or debit card, don’t be persuaded to take out extended credit agreements unless they really do work out cheaper.
• Shop around
  Try as many different places as possible to find the best price. Buy what you want and not what other people say you need. Be wary of extended warranties; the cost of a repair could be less than the cost of the warranty.
• Buy safe to be safe
  Whatever the deal, whatever the temptation, don’t buy from unauthorised traders and don’t borrow from unauthorised lenders. The initial savings and convenience may prove to be a false economy.
• Read the small print
  Check for hidden extras in any credit agreement. Work out the total amount payable.
  Ensure that the monthly instalments are within your budget before signing. Interest free credit can seem attractive, but if you don’t pay on time, or miss a payment, you could have to pay a lot more.
• Do your own credit checks
  If you are going to use a credit card, shop around and compare terms. Some cards charge high interest rates, but provide interest free periods or discounts. Budget for all these costs and put the payment dates in your diary.
• Be organised
  There’s a lot to remember at Christmas. If you’ve borrowed money don’t forget that it
  won’t be long before you have to make a payment. Make sure you pay on time, even if it is only the minimum, or you will be faced with additional charges.
• Start planning and saving for next Christmas
  Once Christmas is over, it’s worth looking at what you did well and what you didn’t. Learn from your mistakes and start planning how you will do things differently next year. This
  might also be a good time to start saving for next Christmas.

Notes to editors

1. The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more information in England and Wales see www.citizensadvice.org.uk
2. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality. For online advice and information see www.adviceguide.org.uk
3. Citizens Advice Bureaux in England and Wales advised 2.1 million clients on 7.1 million problems from April 2010 to March 2011. For full 2010/2011 service statistics see: www.citizensadvice.org.uk/press_statistics
4. Out of 22 national charities, the Citizens Advice service is ranked by the general public as being the most helpful, approachable, professional, informative, effective / cost effective, reputable and accountable. (nfpSynergy’s Brand Attributes survey, May 2010).
5. Most Citizens Advice service staff are trained volunteers, working at around 3,300 service outlets across England and Wales.

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