Page last updated at 11:48 GMT, Friday, 5 June 2009 12:48 UK

Human cost of debt 'yet to come'

Finance
The 'human cost' of the recession is 'gathering pace,' says Wales' CAB

Citizens' advice managers in Wales are warning the "true human cost" of the recession has yet to materialise after debt inquiries rose by almost 20%.

The charities 32 offices in Wales dealt with 111,339 debt inquiries in the 12 months to April 2009, a rise of 19%.

CAB Cymru director Fran Targett said previous recessions showed a lag before the number of debt advice calls peaked.

More recent figures suggested a "spike" in problems with mortgages, loans, fuel debt and bailiffs, she said.

The service, which operates from 200 locations in Wales, overall inquiries rose by 11% on the previous year to 298,119 in the 12 months to April 2009.

More than thirds of these we related to debt, with benefits and tax credit problems rising 11% to 97,803 and employment-related problems increasing by 17% to 22,262.

Problems with mortgage and secured loans increased by 57% as did problems with private bailiffs. Fuel debt problems also increased by 31%.

'Squeeze'

Within the benefits portfolio, problems with Job Seekers Allowance increased by 61%. Within the employment portfolio there was a 124% increase with redundancy-related problems.

Ms Targett said: "Our quarterly figures indicate that since the turn of the year there has been a spike in all these issues, which indicates that the human cost of the current recession is gathering pace.

"Previous recessions seem to indicate that there is a lag between the peak of the human cost of economic downturns and long after the return to official economic growth.

"Both the Welsh and UK governments need to be mindful of the need to continue to support advice services after [economic growth returns], at a time when the there will be an acute squeeze on public expenditure."



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