Citizens Advice Scotland are today calling on MSPs of all parties to do something to help the growing numbers of Scots who are 'drowning in debt'.
Citizens Advice Scotland
Contact: Tony Hutson 0131 550 1010 (or m07774 751655)
Scots in Debt - MSPs Urged To Act
CAS are releasing a series of brand new reports which expose the miserable realities of life for Scots who are in debt, and are lobbying MSPs directly by giving them each a local Constituency Debt Profile, detailing the extent of the debt crisis among their own constituents. Meanwhile a debate on the issue has been arranged in the Scottish Parliament later today (5pm).
Launching the new statistics, CAS Chief Executive Ms Kaliani Lyle said,
"Earlier this year we released figures showing the extent of the debt crisis among CAB clients across Scotland. We demonstated that the levels of debt among Scotland's CAB clients had increased by 50% over the last 5 years (from around £13,000 to over £20,000). Today we release further analysis of those figures which shows the real impact of debt on particular groups, and how people are coping with the crisis.
"What these figures reveal is a picture of real misery for many people. Large numbers of our population are struggling just to get by. Low income groups are amongst the worst hit - including pensioners, young people, lone parents and the disabled. Many of those who are deepest in debt are forced to take out new loans to pay off their existing ones, and a worryingly high number (2 in 5) are going without food or fuel in order to pay their debts as creditors become more aggressive in pursuing them.
"So, we are today calling on MSPs of all parties to act on this crisis. We need action in the long-term to fix our broken economy, so that people are never again in this position. But in addition to that we need action in the short term as well, to help these people who are suffering the misery of debt today.
"We call for better regulation of lenders, more affordable sources of credit (e.g. credit unions) and more funding for good-quality advice groups to help the people who are suffering. And we want to know that every single one of our MSPs is ready to act on this - because it affects the people they are supposed to serve, and we are showing them that very clearly today with our Local Debt profiles.
"Too many Scots are drowning in debt. And this is affecting people in every town, every neighbourhood, every community in Scotland. It's time for action."
For more information, or to arrange interviews, please contact the CAS press office on 0131 550 1010 (mobile 07774 751655).
Notes to editors - click to expand/collapse
MSPs have been invited to receive their local Debt Profile from CAS at the Storytelling Centre at 43 High Street, Edinburgh. EH1 1SR between 8.00am and 9.30am today. MSPs who can't make it to the venue will have their local profile sent to them by email.
MSPs are due to discuss the issue in a debate in the Scottish Parliament later today (5pm), in a debate lodged by Jackie Baillie MSP - chair of the Cross Party Group on Debt. The text of the motion is below.
The new statistics:
The 7 briefing sheets released by CAS today are available on request. Highlights from them include:-
1. HOW PEOPLE COPE WITH DEBT
One in four CAB debt clients had taken out one loan to pay off another.
One third said they had borrowed from family or friends.
2 out of 5 had gone without food or fuel to pay off their debts.
2. LONE PARENTS AND DEBT
Lone parents are 14% of Scottish society, but they are 45% of all CAB debt clients.
The average debt for lone parents has increased by a quarter in the last 5 years.
For every £1 of income, lone parents have average debts of £19. (that's up from £14 five years ago).
3. LOW INCOME GROUPS
Nearly a quarter of our debt clients had a monthly household income of less than £400.
For every £1 of income, this group had an average debt of £52.
4. OLDER PEOPLE AND DEBT (over 60yrs old)
Older people have the highest average level of debt for all age groups, owing an average of £26,010.
Debt levels for this group have increased by almost 50% in the last two years - from £17,767 to 26,010.
They also have the highest average number of debts - 7 (compared to 6 for people in general).
5. SICK AND DISABLED PEOPLE AND DEBT
More than one third of our debt clients said they had an illness or disability.
2 in 5 of all our debt clients told us their debt was due to their illness.
21% of people in debt are unable to work due to ill health.
6. CREDITOR BEHAVIOUR
The number of people being threatened with informal debt recovery action has doubled in the last 5 years.
Creditors have taken some form of recovery action in 4 our of every 5 debts.
The number of debts being referred to debt collection agencies is up by a third over the last 5 years.
7. YOUNG PEOPLE AND DEBT (16-24yrs old)
The average level of debt for young people has nearly doubled since 2004.
The level of debt for this age group is increasing twice as fast as the rate for all clients.
Young people were more likely to want to go bankrupt than all clients, but most couldn't afford the fee.
Notes to editors:-
1.Methodology of the CAS survey
These results were taken from a survey of people who came to the CAB with a debt enquiry in December 2008. In total, 275 people took part in the survey. They were clients at 21 different CABs, based in all parts of Scotland. 6 of these were city-based; 7 were based in urban towns; 6 were from rural areas and 2 were from islands. The participating bureuax were: Aberdeen, Airdrie, Clydesdale, Denny & Dunipace, Dumfries & Galloway, East Ayrshire, East Kilbride, East Renfrewshire, Edinburgh, Fife, Glasgow Easterhouse, Glasgow Maryhill, Glasgow Parkhead, Grangemouth & Bo'ness, Haddington, Inverness, Motherwell & Wishaw, Orkney, Roxburgh, Shetland and West Lothian. NB Two of these bureaux have mnultiple offices: Dumfries and Galloway CAB has 4 offices and the Fife service has 6.
2.The text of the motion submitted by Jackie Baillie MSP reads as follows:
Citizens Advice Scotland Debt Findings
That the Parliament welcomes the new research findings by Citizens Advice Scotland which sets out the barriers and problems faced by vulnerable groups such as lone parents, the elderly, young people and sick and disabled people in Scotland in relation to debt as well as creditor behaviour; notes that the findings show four in ten clients have gone without essentials in order to try to cope with their debt, whilst one in four clients have borrowed further credit to pay their existing debt; notes that two fifths of debt clients reported being pressurised or harassed by their creditors;further notes that two thirds of debt clients said that they would consider going bankrupt in order to manage their debt; calls on the Scottish Government to ensure that schemes like Low Income Low Asset (LILA) scheme and the Debt Arrangement Scheme (DAS) are made fully accessible to debtors who are stuck in a cycle of debt, by abolishing the £100 fee for accessing the LILA route into bankruptcy which only one in five clients said they could unconditionally afford;further calls on the Scottish Government to ensure that more affordable mainstream credit is available to low income groups; commends the work of the Citizens Advice Bureaux in Dumbarton and across Scotland in providing free, impartial and confidential front line advice to all who need it and calls on the Scottish Government to ensure sustained funding for agencies like the Citizens Advice Bureaux in order to address the growing demand for such advice."