The front-page headline in The Times for 22nd May reads, "Big-spending Britons rack up debts of £1trillion", and the citizens of Chelmsford are clearly contributing to this trend, as our statistics show a massive increase in the average amount of debt per debt client. This has jumped from £8,200 last year to £11,000 this year, a rise of over 34%.

Because of the shortage of advisers in general, and debt specialist in particular, we are dealing with far fewer debt clients. Nevertheless, there has been a big increase in the numbers consulting us with housing debts. For tenants, this has largely been caused by continuing problems in accessing Housing Benefit, although failure to prioritise rent payments will always cause difficulties. Amongst owner-occupiers, there has been a big temptation to re-mortgage in order to profit from the increase in property values. The sad outcome of this is that any setback, such as job-loss, sickness or family breakdown, quickly de-rails the family finances. It only takes a few months mortgage arrears to trigger possession proceedings, and with mortgage rates predicted to rise over the coming year, this is likely to be an increasing problem.

We are looking forward to the introduction of a computerised debt package, which we hope will enable us to give more help to more people, and we are also pleased to hear that the FSA has finally given the go-ahead to an Essex-wide Credit Union, which should give access to fairer credit terms to all the residents of our County.

Beth Cornish May 2004

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