The UK debt charity Consumer Credit Counselling Service (CCCS) is analysing the phenomenon of indebtedness and over-indebtedness using data from those persons subject to the counselling. Such empirically founded research informs policy makers about the true nature of the problems being faced by those experiencing problematic debt. Similar research is taking place elsewhere in the EU and should be encouraged. A prominent example is the ECRC German partner iff (institute for financial services) which has been producing statistics on the overindebted in Germany for over the past 6 years through annual reports. The 2011 German overindebtedness study will be published imminently (in German, and will be posted here soon http://www.iff-ueberschuldungsreport.de/).
Latest statistics show the dramatic situation faced by a significant number of UK families.
Recently CCCS released an important report called Debt and the Household, focusing on how British families were coping financially during these austerity times. You’ll probably not be surprised to hear that the conclusions made for grim reading. The report was compiled by The Financial Inclusion Centre for CCCS and focused on “debt and financial vulnerability in the UK, the current trends and recommendations for policy makers”. Its findings have been reported over the past month throughout the press as we’ve felt that it’s vital for as many policy makers – the likes of MPs, think tanks and quangos – need to understand the state of the UK’s personal finances.
Some findings: Only 5% of people who seek help from CCCS have any savings; 4.3m households have no savings; over 1m households have savings under £1,000; 2.9m renters are in rent arrears or struggling to pay their rents; average unsecured debt of CCCS clients on a low income is £12,870; 6.2m UK households are financially vulnerable; 3.2m UK households are in financial difficulty now; 1.2m mortgages are in arrears, in possession or subject to forbearance.See more on findings: http://moneyaware.co.uk/2011/08/10-uk-personal-debt-stats-that-will-astound-you/#more-1761
Note: This UK report is the fruit of past promises: Study “Using counselling sector data to understand over-indebtedness (December 2009)”: As part of BIS's ongoing commitment to monitoring over-indebtedness, we commissioned the University of Nottingham to collect and analyse individual-level client data from Consumer Credit Counselling Service (CCCS), to evaluate its usefulness as an ongoing data source. The study (PDF, 851 Kb) found that this dataset could be an important complementary data source to the commonly-used data derived from more aggregate statistics, such as those provide by the Bank of England. The report suggested two main potential uses for the data: 1) a monitoring system for debt distress, based on current and updateable household data; 2) an investigation at the household level of the persistence of over indebtedness across selected types of household
About CCCS: “Over-indebtedness largely results from a change in financial circumstances, caused by reduced income or overuse of credit, although relationship problems and changes in employment status are common triggers of debt problems. Our clients are from all walks of life and we are able to offer help and advice to those on high incomes as well as low. Last year we provided telephone and online advice, help and counselling to 500,000 people. Many more people visited our website and obtained the information they needed to better understand money and manage their debts. Additionally, we provide after care and support to over 100,000 people repaying their debts through our programmes. These people have comfort and peace of mind in the knowledge that we are always here to help them with any difficulty or obstacle and through however many years it may take them to overcome their financial problems.
Latest CCCS reports
Debt and Household Incomes Summary (pdf) - 12 July 2011
Debt and Household Incomes Report (pdf) - 12 July 2011
2010 Statistics Yearbook (pdf) - 15 March 2011
2010 Statistics Yearbook Appendices (pdf) - 15 March 2011
Introduction: Debt and the Family (pdf) - 15 March 2011
Profile of a bankrupt (pdf) - Q4 2010
Useful UK related links from the CCCS website
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