Debt calls hit record levels

RECORD numbers of people are contacting debt advice groups as financial worries proliferate.

The Consumer Credit Counselling Service claimed it had seen the number of enquiries rocket by 77% in December against the same period the year before as worried consumers seek help.

Over 12,000 called the organisation in December and this month could be worse after it received a record number of calls for a single day on 3 January.

The increase follows five interest rate rises from November 2003 and several Government warnings over the UK's growing consumer debt mountain.

A CCCS spokeswoman said: 'We hope that people are facing up to the fact that they may have money problems earlier. Our researh shows that people tend to wait up to a year before seeking help.'

Debt management company Payplan said it has seen large year-on-year increases in calls for November, December and January. Calls for all three months are around 50% up on the previous year.

Managing director John Fairhurst said: 'December is usually a very quiet month for us but this year we were very busy and that has continued through to January. We've never seen numbers like it before.

'People are becoming more worried about their debts. Previously I think people remortgaged, which masked the problem, but there are less attractive deals on the market so they are having to face up to their problems.'

His views are echoed by Citizens Advice, which said it has experienced a sharp rise in debt-related calls.

The organisation currently receives around 1.1m calls a year but a spokeswoman said it expects that number to rise.

She said: 'Most of the calls usually come in as people open their bills in January.'

Debt Free Direct managing director Andrew Redmond claims the number of Individual Voluntary Agreements it drafts a month will rise from 150 in December to 250 in January, although that is partly to do with the company's expansion.

The company said it currently receives 600 calls a day, with the typical level of debt of people seeking IVA's of £30,000. Redmond claimed the company could potentially produce 400 IVAs a month as people look to rearrange their finances.

He said: 'Our research shows 2.5m people are regularly spending more than they earn each month, they cannot keep doing that indefinitely.'