At the end of last year, the average household was paying almost £200 per month in interest, representing nearly a quarter (23.8%) of available income.
This share rose by 0.1% from Q3 despite a £2 quarterly fall in interest payments as rising prices of essential items outweighed wage increases and thus reduced discretionary income.
Against this economic background, the charity plans to monitor the impact of the cost of credit on the ability of households to meet the costs of everyday living in the months ahead.
Other findings in the CCCS Consumer Debt and Money Report Q4 2011 are:
- The demand for debt advice is forecast to remain high and rise in the coming years as unemployment worsens across the UK. Demand for debt advice is expected to hit another peak in 2014, indicating the lasting distress caused in the aftermath of the financial crisis.
- Middle-aged and elderly people in particular will be increasingly affected by debt problems. The report predicts that CCCS's share of clients over the age of 45 will rise from 28% in January 2005 to a projected 47.6% by December 2014.
- Fastest increasing areas of debt help need are Wales and the most highly urbanised areas of the UK such as Yorkshire and the Humber, which have seen double-digit increases in demand for advice. Yet the areas with the highest actual demand for counselling are London and the North West.
"We will continue to monitor these trends and report the changes faced by households throughout the country."
