Middle-classes flock for debt advice

by Gill Montia

Story link: Middle-classes flock for debt advice

Transact, the national forum that represents organisations working to promote financial inclusion, has reported a sharp rise in requests for advice in traditionally well-off areas of the country.

The organisation represents over 1,200 debt advice centres and while its member bodies are experiencing a rise in demand for debt advice across all regions of the UK, dramatic increases have been reported in traditionally middle-class areas.

Speaking on the BBC’s Radio 5 Live programme, Transact co-ordinator Jamie Elliott acknowledged that the government had funded an additional 500 debt advisers over the past three years but pointed out that resources had been focused on inner-city areas.

Meanwhile, in the past 12 months, towns including Haywards Heath in Sussex and Congleton in Cheshire have seen a 100% rise in debt advice enquiries.

Mr Elliot explained that traditionally, debt advice agencies have served people claiming state benefits and those in social housing.

However, since the onset of the credit crisis, a new type of client profile has been emerging with debt advisers seeing more professional people and homeowners.

According to Transact, many have extended mortgages to pay for home improvements or have generally taken advantage of cheap credit to fund their lifestyles.

This middle-class group is now facing increased mortgages costs plus higher fuel, food and council tax bills, so that even those with substantial salaries are struggling financially.