Debt remained the biggest volume of enquiries for the service with 1.93 million new debt problems advised on by bureaux, an 11% increase on 2007/8. Total employment related problems saw a 17% increase compared to last year and benefits enquiries were up 13%. Over the year the service enquiries saw:
114% increase relating to redundancy (83,024 new enquiries in 2008/9 compared to 38,745 in 2007/8)
61% increase relating to Job Seekers Allowance (109,407 new enquiries in 2008/9 compared to 68,052 in 2007/8)
49% increase relating to mortgage and secured loan arrears (95,342 new enquiries in 2008/9 compared to 64,053 in 2007/8)
24% increase relating to bankruptcy (137,406 new enquiries in 2008/9 compared to 110,819 in 2007/8)
19% increase relating to fuel debt (82,891 new enquiries in 2008/9 compared to 69,378 in 2007/8)
15% increase relating to Council Tax arrears (137,551 new enquiries in 2008/9 compared to 119,795 in 2007/8)
Enquiry figures showed a sharp spike at the start of 2009, with debt enquiries 21% higher in Jan - Mar 2009 compared to Jan - March 2008 and enquiries about redundancy 179% higher than the same period last year.
A recent profile of CAB clients revealed that CAB debt clients owe an average of £16,971, an amount it would take an average of 93 years to pay off at a rate they can afford. The most common reasons for debt were low income, over-commitment, illness or disability and job loss. But irresponsible lending, poor financial skills and increases in the cost of living had also played a significant part in people's debt problems.
Speaking at the reception, Citizens Advice Chief Executive David Harker will also highlight how the service has been able to meet increasing demand thanks to a £10million boost from HM Treasury earlier this year.
The extra funding, announced in the Pre Budget Report, has allowed 338 bureaux, 85% of the bureau network, to open for longer for 14 months from February 2009 to help meet increasing demand as a result of the recession. The extra capacity will allow bureaux to see a minimum of 335,000 extra people. 16% of the additional hours of advice are being provided before 9am and after 5pm.
Citizens Advice Chief Executive David Harker said: "These new figures show the human impact of the recession as more people are coming to the Citizens Advice service for help. In particular we are seeing an enormous rise in the number of people turning to us for help because they have lost their job, or are struggling with debts or having problems keeping up with their mortgages.
"A recent funding boost has enabled us to see more clients, and train more advisers but we are expecting to see many more people struggling with severe debt and related problems as the recession continues to take its toll.
"It is therefore absolutely vital that all lenders and creditors treat people in arrears fairly and sympathetically, negotiate with borrowers in trouble and do everything they can to help ease their debt problems and avoid adding to them."
David Harker will also today announce the winner of the third annual Citizens Advice Parliamentarian of the Year award, selected as a result of a nomination by their local Citizens Advice Bureau for working closely with the Citizens Advice service both in Westminster and in their constituency, to deliver real change. The winner in 2007 was Treasury Select Committee Chairman John McFall MP and in 2008 Liberal Democrat Shadow Chancellor Vince Cable MP.
Commenting on tghe figures, Alan Tomlinson, partner at licensed insolvency practitioners, Tomlinsons, said: “These gloomy figures from the CAB make depressing reading and are a stark reflection of the appalling economic conditions that have seen many companies, of all sizes and across all sectors, go to the wall and thousands of people lose their jobs in the past 12 months. Sadly, the CAB figures are an accurate barometer of the financial state of the nation.
"What's worrying though, is that as depressing as these figures are, the worst of the storm is probably still ahead of us. The number of people in financial difficulty coming to see us since the beginning of the year has shot through the roof and the short term economic outlook doesn't suggest that we are likely to see less people coming through our doors in the months to come. Many are struggling with debts or a mortgage that they took on during the good times, and now find themselves in a position where they simply don't have the means to pay those debts."
