What are the driving forces that lead people into unmanageable debt? In the past, you might have been confident in blaming long-term illness or disability, or perhaps redundancy in economic downturns like the one the UK and the rest of the world have faced in recent years.
According to Citizens Advice, times have changed – and so have the reasons why people lose control of their finances.
In fact, in the 21st century, people are much more frequently being forced into debt simply by the cost of living, with wages unable to meet their outgoings, and a spiral of ever-increasing debt arising as a result.
Citizens Advice chief executive Gillian Guy said: “Consumer debts like credit cards and personal loans have traditionally been the most common debt problems that come through our doors.
“But now priority debts such as council tax arrears are gradually building up as people struggle to cover everyday costs.
“In the past, people were more likely to get help for debt problems triggered by life events such as illness, redundancy or separation.
“But in recent years, more people are being pushed into debt as they struggle to stretch their income to cover everyday living costs.”
The comments relate to how Citizens Advice’s workload has changed since the onset of the economic crisis in 2007-08.
At that time, more than a fifth of all enquiries to CABs related to credit cards and store cards, and more than 15% were about unsecured loans.
Now the single biggest issue is council tax arrears, representing about 12% of all enquiries, while credit cards have dropped to around 10% and unsecured personal loans are down to around 9%.