One in six adults at risk of crisis debt
One in six adults are at risk of crisis debt, according to the Money Advice Service (MAS).
The organisation said around eight million people in the UK regularly miss bill re-payments or feel overwhelmed by their debts. Of those, less than one in five seek advice to help their situation.
MAS said this means a worrying 10 percent of the population could be suffering in silence with serious money problems.
It said young adults, people who rent their homes, large families and single parents are noticeably at higher risk.
MAS has identified warning signs creditors can look out for when recognising debtors who are coming close to being in crisis debt.
Early signs are said to be customers approaching the spending limits on cards, making minimum only payments and a change of use in credit (for everyday spending).
Signs of crisis include missed payments, card juggling (paying off debts on cards with other cards/debts, making space on cards for more spending) and applying for credit to pay off debt.
As for friends and family, MAS said subtle clues about individual’s behaviour which seem out of character could include: over spending, appearing anxious, withdrawn or depressed, sudden change in weight or seeming more secretive.
Gillian Guy, chief executive of Citizens Advice, said: “Unpaid bills and ongoing debts can create huge anxiety in people’s lives. Debt problems can quickly escalate and become increasingly difficult to manage, so it’s crucial people seek help early on rather than waiting until they reach crisis point.”
MAS is urging creditors and friends and family of debtors to point those individuals struggling with their finances to access free debt advice.
In January MAS published an Understanding the Impact of Debt Advice report, which found after three months of seeking debt advice 65 percent of debtors were either repaying their debts or had repaid them in full.