Alarm bells ring as calls to debt charity soar by 42%

The rise in the cost of living is hitting many hard. Picture: Phil Wilkinson

The rise in the cost of living is hitting many hard. Picture: Phil Wilkinson

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DEBT charities have warned of a “dramatic increase” in the number of hard-up residents turning to them for help.

StepChange said 1052 people from the Capital contacted its helpline last year, an increase of 42 per cent from its 741 calls in 2012.

The charity said its clients struggling to make ends meet have on average just £28 left each month – £7 a week– after covering their essential household bills.

In 2013, city residents who contacted the charity’s helpline owed an average of £12,544 in unsecured debt.

This week marks the charity’s Debt Awareness Week, which aims to turn the spotlight on the potential signs of debt problems and encourage people to seek advice.

Mike O’Connor, chief executive of StepChange, said: “Debt can have a devastating effect on people’s lives in the form of mental health issues and family breakdown.

“We need people to take early action to prevent some of the worst effects and get back on their financial feet sooner.”

The findings were echoed by the Cyrenians – a charity which specialises in preventing homelessness – which is dealing with more than 19 referrals a week.

Meanwhile, grassroots group Edinburgh Coalition Against Poverty said hundreds of people had been turning up to its debt advice sessions.

Carol-Anne Alcorn, interim chief executive of Cyrenians, said of the charity’s homeless prevention service: “We are seeing up to 19 referrals a week, all are financial or debt-related issues. People are struggling to deal with a cost of living increase in terms of food and utility bills, while wages have either stayed the same or fallen.”

As a result of the number of debt issues they are witnessing, the charity, with the help of funding from the Scottish Legal Aid Board, has employed a specialist key worker to focus on financial advice.

Ms Alcorn added: “When we started in 2009, two per cent of people who accessed our services were owner-occupiers, that figure has now risen to 13 per cent.

“That is a vast change and a sign that people right across the board are struggling to make ends meet.”

Michael Cormack, of the Edinburgh Coalition Against Poverty, said: “We run support sessions offering debt advice and there are people literally queueing out the door. We see a lot of people who have had their benefits cut or stopped by the job centre for the most trivial of reasons.

“One man who recently contacted us has had his benefits cut as he has now found a job.

“His problem is that he doesn’t begin the job for several weeks and as a result is now amassing debt.”

Earlier this week, the News revealed that new rules were being drawn up to crack down on the spread of payday loan shops by excluding the controversial firms from receiving business rates relief and changing planning rules to make it easier for councils to refuse them ­permission.

david.oleary@edinburghnews.com