Debt Advice on Increase

The Government’s free debt advice service for mortgages and credit is being forced to turn people away because it is unable to cope with a 28% leap in demand, a report has warned. The Public Accounts Committee, which conducted the investigation, said the Department for Business, Innovation and Skills approach to free advice was ‘unnecessarily complex’, with more than 50 different projects and a number of funding streams. Consumers owed £1.46 trillion in debt at the end of last year, with personal borrowing representing 160% of household annual pre-tax income. The recession has caused demand for debt advice to soar; with research suggesting around one in ten people are struggling to keep up with their borrowings. The Government service struggled to cope with the 28% rise in the number of people contacting it, leading to a quarter of agencies either turning consumers away or forcing them to wait for more than a month for help.