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Personal debt doubles in West Berkshire




Total is set to break £8m barrier and services expand locally to cope with debt advice demand

FEARS that West Berkshire is in the grip of an unprecedented personal debt crisis have been raised after the local Citizens Advice Bureau said the amount owed by its clients in the district this year is set to break the £8 million barrier, a rise over 50 per cent in one financial year. A Christmas cashflow nightmare for those struggling to pay the costs of the festive period, combined with wage freezes, job losses and the gloomy economic situation, has sent personal debt levels soaring, and now a stark warning has been fired to beware illegal loan sharks and payday lenders who are more prevalent than ever. A growing number of people are also unable to pay for their homes according to the advice service, which said it has experienced a big jump in the number of mortgage arrears calls where typically it deals with credit card and rent arrears debts. In the last financial year the personal debt recorded by West Berkshire CAB clients was £5.42m. However, in the first three quarters of the current financial year that figure has already surpassed £6m, and the chairwoman of the CAB, Jan Rothwell, said that it was on course to top £8m, doubling the 2006 figure of £4m.

“This is a serious problem. Everyone is having to pay more for things like utilities and fuel but the money isn't there and it seems to be getting people in real trouble,” she said. “In the previous financial year (09/10), we saw a rise of seven per cent. This is a huge jump, and if it carries on we could see those numbers go over £8m. “People in West Berkshire are losing their jobs and finding their lifestyles are no longer sustainable. “Payday lenders do have a place, in the short term, but people get caught up and their problems escalate. Seek advice and seek it early.” A new not-for-profit credit union that can help people financially, Community Savings and Loans (CSL), in conjuction with Sovereign Housing, has expanded its services in Newbury to cope with the demand and has this week again advised those facing debt worries to act early and seek advice. A spokesman for CSL, Geoff Round, said the ease in which unsecured high-interest loans were obtainable was dragging many people into the mire. “They (doorstep lenders and payday loan firms) prey on people who can't get anything from the banks,” he said. “We all have to pay for Christmas, there is no point in getting yourself into further trouble. People are paying thousands of pounds in fees and getting themselves into real difficulties.”

He said those who experienced an unexpected problem such a broken down car or washing machine should seek the advice of a credit union before rushing into a decision. In the face of rising inflation, VAT and taxes and the soaring cost of living, the MP for Newbury Richard Benyon said the Government was not to blame for the deepening levels of personal debt. “When a global debt crisis is left as much by personal debt as the mistakes made by the last Government we need to make the sort of decisions nobody goes into politics to make,” he said. “By taking this action we are preventing more problems arising in the future.” The EU has this week announced an investigation into loan websites after it found 70 per cent were operating outside the law by misleading borrowers about credit deals, and Mr Benyon backed calls to clamp down on the practice. “Illegal loan sharks and doorstep lenders are a huge problem in this country and should be threatened with the full force of the law,” he said. CSL has been operating in Newbury from Broadway House and is set to expand its services to operate every Thursday from Sovereign Housing's offices in Bartholomew Street.



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