Rising household bills cause debt woes

SUNDAY, AUGUST 06, 2006

The Consumer Credit Counselling Service (CCCS) has said that recent rises in utility bills and taxes or pushing many people into debt. The CCCS claimed that their clients were paying over £30 more on average in utility and council taxes than in 2003.

For individuals who are already struggling to pay their bills, the recent interest rate rise will no doubt add further debt misery for many.

In May, Citizens Advice said that their clients would take an average of 77 years to repay their debts, effectively leaving them with a lifetime of debt. The CA also that the number of people seeking debt advice had doubled in the last 8 years. Most of their clients are in the low income bracket, with averages debts of £13,000. Many of these individuals simply can’t afford the fees necessary to declare themselves bankrupt, and would likely struggle with an IVA (Individual Voluntary Arrangement).

The CCCS has asked that the utility companies freeze bills for people receiving debt help and advice. Over the last year all the major gas and electricity producers have increased their prices. From September this year, electricity prices will rise by 9.4% and gas prices by 12.4%.

The CCCS urged the energy companies to hold back on the price rises for people in debt management plans.