Debt charity Consumer Credit Counselling Service (CCCS) has seen a dramatic rise in calls from people in rented accommodation seeking help with eviction.

Previously, it was homeowners rather than renters worried about losing their home who were contacting the charity for help with avoiding eviction. CCCS says that this is no longer the case and is receiving more and more calls from private tenants and those living in social housing who are struggling to pay their rent.

Although over half (50.9%) of all people who sought help with their debts from CCCS last year lived in rented accommodation and had an average of 5.5 unsecured debts, most had been able to pay their rent in 2009. The charity is warning that this sudden rise in renters seeking help with eviction may lead to increased homelessness and says that rent is a priority debt which should be paid before any non-priority debts.

Laura Carver, CCCS helpline manager says: “Up until now, almost all of those calling for help in staying in their homes were owners who were struggling to keep up with their mortgages. We have been surprised by the sudden rise in people in rented accommodation phoning us for help with eviction.

“While we have always had more people in rented accommodation calling for help with their debts, they have usually been able to maintain their rent payments. This suggests that the personal finance situation for those in rented accommodation is deteriorating to the extent that they many end up homeless.”

According to new research by uSwitch.com, new mothers are being forced back to work by debt and financial concerns.

Over half of new mums returning to the workplace do so because of debt and financial considerations (52%) compared with just 22% who want to continue their career. And such is the financial impact of going on maternity leave that one in ten (9%) feel forced to return to work earlier than they would like to make ends meet.

The average family sees a 34% drop in their net monthly household income during the maternity leave period with income dropping from £3,431 a month to £2,266 a month while on statutory maternity pay. At the same time costs rocket with the average mum spending £2,152 on baby items prior to giving birth. However, the expense doesn’t stop there. While on maternity leave mums spend an additional £2,521 on baby items – accounting for 90% of the average net monthly household income during the statutory maternity pay period.

Almost six in ten mums (56%) are not adequately prepared financially to survive on a reduced income while meeting the additional costs of a baby. Just a quarter (25%) are fully equipped to fund their maternity leave and have enough money saved in advance while a lucky one in ten (9%) don’t need to worry as their partner’s income is enough to see them through. Over a quarter (29%) save less than £1,000 to help cushion the blow, but on average expectant parents save £3,265 to help limit the impact of losing a large chunk of their net household income.

As well as not saving, almost three in ten new mums (29%) are not aware of their company’s maternity package prior to taking maternity leave, while a further three in ten (30%) know that the package isn’t ideal but don’t want to wait any longer to have children. But whether women are aware or not, the effect can still be the same with many struggling to keep their heads above water once the reality of living on a reduced income kicks in. In fact, over a quarter of new mothers (27%) say that going on maternity leave has a much greater financial impact than anticipated, while four in ten (41%) say it is as tough as expected.

Four in ten new mums (41%) end up in debt during maternity leave. The average debt incurred is £1,329. This, coupled with other financial pressures, forces many to change their plans. One in ten (9%) end up re-thinking their intention to be a stay-at-home mum, while a further one in ten (9%) are forced to cut their maternity leave short, returning to work sooner than they would like in order to make ends meet.

But despite debt and financial considerations being the biggest driver behind new mothers returning to work, 40% of those who return end up taking a pay cut to go part-time. Tellingly, just 21% of new mothers returning to work believe that their future progression and earning capacity is unaffected by their maternity break.

Ann Robinson, Consumer Policy Director at uSwitch.com, said:

“Debt and financial considerations combine to be the biggest motivating factor behind new mothers returning to the workplace. Despite women being told that they can ‘have it all’ and can choose whether to be a working or stay-at-home mum, the fact is that most have this choice stripped away from them by the financial realities of modern life.

“With the new Government planning to cut child trust funds and the impending budget causing concerns over pay freezes and redundancies, family finances are under more pressure than ever. The high cost of living coupled with the often crippling cost of a mortgage means that many households today need two incomes to get by. Unfortunately, new mothers are often paying the price for this by seeing their choices taken away.

“Preparation is key for those planning a family. Check out your company’s maternity policy, calculate how much you will need to survive, save money in readiness and cut down on household bills and unnecessary expenses. By keeping a tight lid on your household budget hopefully you will remember your maternity leave for the right reasons and not for the financial headache and debt it can bring.”

New research by insolvency trade body R3 has revealed that over 40% – 44% to be precise – of individuals in debt and who freely admit to struggling with such debt have not sought financial advice from a financial expert as they do not believe that their problem is big enough to require such assistance.

R3 estimates that nearly 1 million people struggling with debt have not sought help, and the research found that close to ten percent (9%) of individuals were reluctant to seek advice because they were afraid of being made bankrupt.

The findings show that the stigma of admitting to debt problems remains as more than one in ten (14%) have not sought help because they are worried about what people would think, with eleven percent concerned about the effect it will have on their families.

R3 President, Steven Law commented:

“It is worrying that individuals are not seeking professional advice at the first signs of financial difficulty because they don’t think their problems are severe enough. While it may be the case that these problems are resolved without help, there is a risk that they might snowball out of control. Professional advice does not mean immediate bankruptcy. It could simply result in advice on budgeting.

“It would seem that many of the individuals who need financial advice are burying their head in the sand. Unfortunately, refusing to acknowledge your financial troubles won’t make them disappear. The sad thing is, the longer someone takes to get help the fewer options will be available to them. If individuals leave it too late to seek help, bankruptcy may be their only choice.

“If someone seeks help early they will be able to take stock of their finances and will be on their way to attaining peace of mind. They may also avoid going into a formal insolvency procedure.”

Research exploring the experiences of people struggling with their debts by insolvency trade body R3 has shown that a far higher proportion of younger people who participated in the research are more likely to leave their bills unopened and avoid creditors than their older counterparts.

Among those struggling with their finances, over a third (36%) of the 18-24 year olds surveyed have not contacted anyone – either their parents or a professional financial advisor – for help as it is ‘easier not to think about it’. This compares to just 9% of 55-64 year olds who do the same.

Meanwhile, 26% of 18-24 year olds don’t open their bills because they can’t face their contents, compared to just 10% for 65s and over, whilst 28% of 18-24 year olds are trying to avoid the people that they owe money to, compared to only 11% of 65 year olds and older.

Worryingly, 30% of 18-24 year olds cited that they don’t know where to go for financial advice as the reason why they haven’t contacted anyone, compared to 8% of 65+. Across all age groups meanwhile, 44% of those struggling with debt mistakenly believe that debt advice must be paid for.

R3 President Steven Law commented:

“Despite a global recession and near financial meltdown, younger generations are still operating on the basis that high levels of debt are normal and the consequences of this have created a clear generational split. It is extremely troubling that irresponsible attitudes towards debt are entrenched by the age of eighteen as this is likely to lead to a lifetime of financial problems.”

New research by insolvency trade body R3 has revealed that nearly 70,000 people in Britain have contacted either a loan shark or doorstep lender because of financial difficulties.

Their questionnaire revealed that a total of 67,000 people have contacted either a loan shark or doorstep lender about their debts, whilst a further 13% have considered contacting either a loan shark or a doorstep lender because of financial difficulties.

According to R3’s research, there are 961,000 people in Britain who say that they are ‘struggling with debt but have not sought help’, whilst one in four people (23%) struggling with debt admit to avoiding the people that they owe money to, while a further 30% of people struggling with debt have not spoken to their family or partner about their problems.

Steven Law, President of R3, commented:

“Going to this source [either a loan shark or a doorstep lender] for financial resolution will simply build up a larger store of debt and create more pressure and stress. We must highlight the importance of obtaining professional advice over panic measures that will worsen the problem.

“Post-recession we stand on the brink of a personal insolvency crisis that will take years to work through the system as these findings indicate.

“Clearly traditional fears of what others may think or the fear of bankruptcy is still putting people off seeking a solution to their problems. Unfortunately, avoiding the problem or going to the wrong source is likely to only increase the eventual likelihood of bankruptcy.”

The low numbers of older people, especially those aged 60 and over, utilising online debt counselling support is a concern according to national debt charity Consumer Credit Counselling Service.

Consumer Credit Counselling Service believe that the older generation in Britain, specifically those 60 and over, are missing out on a simple and anonymous way to get support with their debt problems because they are apprehensive about going online. Indeed, figures released by Consumer Credit Counselling Service show that only 3% of the 153,000 people who used its online counselling tool CCCS Debt Remedy during the whole of 2009 were aged 60 or over.

The charity says that this apprehension will lead to many delays for people seeking help with their debts as online debt counselling is an important way for anyone embarrassed about their problem to seek help anonymously and at a convenient time for them.

And with today (21st May) being Silver Surfers’ Day (a day that promotes the use of digital technology by older people), the charity is highlighting the benefits of online help for older people who are worried about their debts, urging them to consult tools such as CCCS Debt Remedy to find solutions to their debt problems.

Paula Searle, Head of E-Services, Consumer Credit Counselling Service, said:

“Although people should seek help in the medium where they are most comfortable, I am concerned that older people should not miss out on any of our services.”

The charity says that employers are in an important position to help any staff member of theirs who finds themselves with an unmanageable level of debt, and that organisations should encourage staff with debt problems to seek help immediately. It says that the sooner people seek help for their debt problems the more can be done to help them and that a delay can lead to more serious consequences.

CCCS says that employers should also refer staff to free sources of debt advice to prevent them from going to companies who will charge them for dealing with their debt problems. According to the charity, these companies can charge people thousands of pounds and usually front-load the fee which results in people spending the first few months of a debt repayment plan paying the fee instead of repaying their debt.

Delroy Corinaldi, External Affairs Director, CCCS, said:

“The UK’s personal debt problem is likely to get far worse over the next year and employers are in an important position to help staff who have a debt problem.

“This doesn’t have to mean speaking to employees individually as those with debt problems are likely to feel very private about their finances and may not reveal that they have a problem, while suggesting staff have a debt problem could be intrusive. Instead, employers can help them by providing information on noticeboards and in staff magazines that signposts them to where they can get free debt advice and support.”

New figures released by insolvency trade body R3 have revealed that 31% of people in statutory insolvency procedures are still being harassed by creditors who they owe money to. The 31% is comprised of 44% of people who have filed for bankruptcy and 25% of those in an IVA.

The research also shows that a similar proportion of people (44%) in a Debt Management Plan (DMP) also continue to be chased by creditors.

Commenting on the findings, R3 President Steven Law said:

“It is astounding that individuals continue to be hounded by creditors despite coming under the protection of statutory insolvency procedures. The decision to file for bankruptcy is a difficult one that, once taken, is meant to stop the endless contact from creditors. That such a large proportion of bankrupts are not afforded the peace of mind they are entitled to is of grave concern.”

“The fact that the same percentage of bankrupts and people in a DMP are hassled by their creditors suggests that no matter what procedure a person is in, they can still be contacted. Either creditors need to ensure their records are up to date or they need to play by the rules.”

R3 is also calling for a ‘single gateway’ procedure into personal insolvency to stop the ‘insolvency journey’ whereby debtors start off in one procedure only to discover they were poorly advised and better suited to another. R3’s research highlights that almost a third of those who are currently undergoing bankruptcy were in a DMP before becoming bankrupt.

Debt charity Consumer Credit Counselling Service (CCCS) has said that it has seen a sharp rise in calls to its helpline during the first three months of 2010, with over 93,000 people calling it during Q1 2010.

This compares to 69,432 for Q1 in 2009. Receiving a record 335,323 calls to its helpline in 2009, CCCS says that it expects the number for 2010 to be even higher. The debt charity says it is able to deal with the continued rise in calls as it has increased its capacity in response to growing demand.

To ensure that everyone who needs advice and support with their debt help receives help in a way that is best suited to them, CCCS supports the recent recommendation in the Public Accounts Committee report ‘The Department for Business, Innovation and Skills: Helping over-indebted consumer’ that the Treasury allow the Department greater flexibility in the use of its funds for debt advice.

Currently, the Treasury does not permit funds it provides for face-to-face advice to be used for other, cheaper, forms of advice, even though they are preferred by some users. The report recommends that it evaluate urgently the potential for other forms of advice to deliver help to more consumers than it can currently reach.

Delroy Corinaldi, CCCS External Affairs Director, said:

“The UK’s personal debt pain continues, and this is even before the imminent public spending cuts, so it is crucial that those who find themselves in this situation have access to free, impartial and independent advice in whichever way is best for them: online, face-to-face or over the phone.”

New research from the Post Office shows that more than a fifth (21%) of UK residents currently in debt are lying to their partners about the amount of money that they owe. 31% also admit to hiding the extent of their debt from other family members.

The Post Office’s figures also show that the average person in the UK now has £9731.51 worth of debt, but that, on average, people will only admit to owing £4,603.17 when talking to a partner or family member.

The report also revealed the serious emotional and physical consequences of covering up that debt, ranging from sleepless nights and anxiety, to turning to alcohol and problems at work, with 43% of people suffering from sleepless nights, 32% from higher anxiety, 21% from mood swings, whilst 15% turned to comfort eating and 12% turned to alcohol. 12% suffered from not being able to do their job properly, 12% from volatile nerves, whilst 6% lost the trust of their partner.

According to the research, 78% of people who have an amount of hidden debt have never confessed to the true extent of their financial fibbery. Of the 22% who did confess the true extent of their dishonesty, the majority (60%) were caught out rather than choosing to come clean.

Of those who were found out, a quarter of people (25%) reported that they still tried to deny everything, despite one in four (26%) stating that hiding the debt only made their money problems worse.

The research also shows what leads to debt problems for both men and women. In the case of men, 19% are hiding their expenditure on alcohol, whilst 45% of women are hiding expenditure on expensive clothing.

Doug Strachan, Director of Financial Services at the Post Office, said:

“The recession has put a massive strain on many families and people may be, for the first time, experiencing levels of debt that they cannot control. The most important thing to remember is that if you do need to borrow money make sure you are responsible about it and set out a clear re-payment plan. Managing the debt effectively can mean there is no need to experience the terrible emotional and physical symptoms hiding debt can result in.”

The number of people taking out personal loans to consolidate their debts has dropped sharply over the last two years new figures from Sainsbury’s Finance reveal; perhaps indicating that many borrowers are attempting to pay off their debts rather than consolidating them.

Two years ago (2007), £1 in every £13 borrowed by Sainsbury’s Finance personal loans customers was solely for debt consolidation purposes. In 2008 this dropped to £1 in every £19, falling to £1 in every £50 in 2009. Contrastingly, large purchases such as home improvements and cars are becoming much more common reasons for people to take out a personal loan.

The supermarket bank says that a decline in debt consolidation may be an indication that the difficult economic climate has led debt-conscious consumers to try and pay off their debts, an analysis that backs up Bank of England statistics which show that for five consecutive months in the latter half of 2009, repayments outstripped new unsecured consumer credit.

Steven Baillie, Head of Loans at Sainsbury’s Finance, said:

“Debt consolidation has always been one of the most common reasons for people to take out personal loans, but while more and more people are taking out a loan for other reasons, there has been a sharp decline in the proportion of people borrowing money in order to consolidate their debts. This suggests that more and more people are choosing to repay their debts rather than consolidate them.

“However, for those with multiple debts, consolidation is still one way to reduce their monthly outgoings as long as they look around for the best rates on the market, which could save them a considerable amount in repayments.”

New research by Consumer Credit Counselling Service (CCCS) has revealed that online debt help is most popular amongst the under 40s.

Two-thirds of people of the 150,000 people who used CCCS’ online debt counselling tool Debt Remedy in 2009 were under the age of 40. This follows on from CCCS figures in 2008 that also suggested that two-thirds of people who used Debt Remedy were under 40.

The CCCS’ figures also indicate that women make more use of Debt Remedy than men, with 2008 and 2009 figures showing that of those who used the service, 53% were women (with 47% being men).

Online debt help and counselling is also most popular amongst low earners. 40% of all Debt Remedy users had an annual income of between £10,000 and £19,999. The income group with the fewest number of CCCS Debt Remedy users was those earning £30,000 a year or more, with only 16.5% of users coming from this category.

The figures also reveal a dramatic regional variation of users consulting online debt help. Looking at the number of users per region, CCCS’ research shows that whilst 14.8% of Debt Remedy users came from the South East, only 1.7% hailed from Northern Ireland. At 13.7%, the second highest number of users came from the North West, and at 10.4%, the third highest group came from Yorkshire.

Peter Searle, Head of E-Services at CCCS, said:

“The higher rates of online debt counselling users in any particular category is likely to be a combination of need for help with their debts and general internet usage.”

The Department for Business, Innovation and Skills, which introduced a project to offer face to face advice for people who were struggling with debt, has until now been relatively successful. However, the programme is reportedly starting to struggle because it cannot keep up with demand.

Mr. Leigh commented:

“The growing demand for debt advice is outstripping the Department’s capacity to provide it.”

In 2004 the Government launched a strategy designed to improve the support given and to reduce the number of people in unmanageable debt.

However, Mr. Leigh suggests that the strategy has failed to deliver because no one is in charge of the strategy, groups intended to oversee it have not met, and there has been no reporting on its progress since 2007.

Mr. Leigh adds:

“It must work with those in the public, private and third sectors who provide debt advice, to do all that they can to make good quality guidance available for those who need it.”

“At the moment, consumer debt stands at around £1,500 billion, and 11% of the UK population struggle to manage their debts.”

British people are borrowing once more, says new research by unbiased.co.uk. For every pound saved, 62p was borrowed during the last quarter of 2009. This trend of increased public borrowing and less saving saving looks set to carry on through 2010.

By the end of 2008, £1.68 was being repaid for every pound people saved. This repayment trend of 2008 failed to continue. In the first quarter of 2009 Brits were borrowing once more at 13p for every pound they saved, 30p in Q2, 43p in Q3 and 62p by Q4.

The contrast of previous year’s repayments and recent borrowings is clear when looking at the overall figures. In 2009, Brits borrowed in total £28.2 billion worth of non-mortgage debt. While in 2008, repayments amounted to £39.3 billion.

The recession is over and consumers appear to have dropped the saving habits taken up during previous years. During 2009, £71.6 billion was saved compared to the larger amount of £113.4 billion in 2008.

There is concern for people’s future financial provisions as it appears a return to borrowing is taking place. Britain is still not yet debt free and the reversal in spending habits is worrying some.

Karen Barrett, Chief Executive of unbiased.co.uk, commented:

“The credit crunch appeared to have a dramatic shock effect on the public, who were jolted into paying off their debts, but it appears this has failed to effect long-term borrowing and savings habits.

“There is no indication that we will see an improvement of financial behavior in 2010.”

In a new research from Scottish Widows, half of all men questioned about their “financial IQ” rated it as “good” or “excellent” (49%), but just a third (34%) of their female counterparts reported the same confidence when it comes to their financial intelligence.

When it comes to the nation overall, the survey suggests that nearly half (45%) of Brits feel their financial IQ is “OK, but could be better,” one in ten (10%) rate their financial IQ as poor, and 2% say it is ‘”non-existent.”

Those Brits who worry about their finances spend an average of 11 hours a week doing so, which could equate to more than a working day each week – or 24 whole days a year. In the battle of the sexes, the survey founds that men spend more time worrying about their finances than women (12 hours vs. 10 hours per week).

The survey also shows that young people worry the most about their financial futures, with those aged 18-34 spending 13 hours per week worrying, compared with 11 hours among 35-54 year olds and 9 hours among those aged 55 and over.

Personal finance journalist Rosanna Spero said:

“Men appear to be much more confident when it comes to their money know-how, rating themselves as being financially “fitter” than women. But irrespective of whether you’re male or female, as a nation it seems we’re simply not that confident when faced with issues such as financial products, as well as our understanding of the current economic situation.”

Three in four people are asking for debt help while owing less than 20 times their net monthly income – the traditional trigger point measure for identifying debt as a problem. In addition, just a quarter of those getting advice are eligible for a repayment plan. New figures from the Consumer Credit Counselling Service (CCCS) suggest that more people are struggling to repay debts relating to small amounts of money. This all implies that people who are not addressing their debt concerns early on are falling into a spiral that becomes harder to break. Put very simply, this survey points to the fact that the sooner you seek help with problem debts the easier it is to get them sorted and get life back on track.

Follow our three top tips to get your debts sorted and see if a repayment plan is right for you.

1. Get a better rate on your loan or credit card

Credit card debt is some of the most expensive debt you can have. So borrowing on your credit card is going to be costly unless you have the best deal you can get.

Credit cards accounted for the highest proportion of debts, according to the CCCS, at just over 46 per cent, followed by personal loans at 39 per cent of enquiries.

If you are paying 16 per cent a year on a debt of £10,000, you would be paying £1,600 a year in interest.

So getting a 0 per cent deal if you can will give you at least that much to actually eat into the debt you have built up.

The Barclaycard Platinum card is currently offering 0 per cent on balance transfers for 15 months, with a fee of 2.9 per cent of the amount transferred charged. The rate then reverts to 15.9 per cent.

The Virgin Money credit card is offering 0 per cent on balance transfers for 16 months (offer ends Wednesday 17th March!), but charges 2.98 per cent of the amount being moved. At the end of the term, it reverts to 16.6 per cent.

In both cases, you would need to use the interest savings and any extra cash you can lay hands on to reduce the debt on the card to maximise the benefit of the 0 per cent rate.

2. Reduce your loan rate with a lower interest loan, a 0 per cent card, or using a 0 per cent overdraft.

If you can get a better rate for your loan than you currently have, then do it. You do not even have to transfer the whole loan to the same place.

For example, let’s say you have a loan of £5,000 outstanding. If you can transfer your loan to a 0 per cent credit card deal, then that would be best, and the Barclaycard Platinum or Virgin Money card would be ideal for this.

However, if you cannot get these cards, or any other 0 per cent card, then you have other options. Check out the 0 per cent overdraft from Alliance & Leicester.

You can get an arranged overdraft up to £2,000 on this account, and you would not pay any interest for the first 12 months. After that, the most you would pay is £5 a month to use this overdraft, or £60 a year. On £2,000, that works out to an interest rate of 3 per cent – still much lower than you can get on either a personal loan, many mortgages or credit cards.

Of course, that would not clear your total loan, but it will make a dent in it. So get the lowest rate you can for the remainder.

Existing Nationwide customers can get 7.6 per cent with the building society for loans of £500 or more.

If you needed to borrow £3,000, then many loans would be closed to you as the amount you need is too small for the minimums. So be wary of getting into loans that start to become much more expensive.

For example, a search on Moneyfacts came up with a loan rate of 10 per cent with Zopa on £3,000 borrowed over three years. A debt advisor can help you decide on the right course of action.

3. Speak to a debt advisor now

Debt problems are easier to sort out the sooner you address them. You may be embarrassed about the position you are in, but it will only get worse if you do nothing. Reputable debt advisors will speak to your creditors on your behalf with a view to freezing interest on existing debts and encouraging the writing off of payments you can’t afford.

According to figures released by debt charity Consumer Credit Counselling Service, men are more likely to become insolvent than women.

Last year, of those the charity recommended an Individual Voluntary Agreement (IVA) to, 55.4% were men, whilst 51.4% of those recommended bankruptcy were also men.

The existence of an insolvency gender divide is supported by figures that CCCS has obtained from the Insolvency Service, with statistics from 2000 to 2008 showing that men have always taken out more IVAs or gone bankrupt more than women. In 2008, the most recent available figures by gender, show that 23,173 women went bankrupt in 2008 compared to 37,972 men, an increase of over 50%, while 17,300 women took out an IVA, four thousand less than the 21,318 men who did.

The levels of debt for CCCS clients gives an indication why there are higher numbers of insolvency among men. While couples have more debt than single people, on average owing just over £30,000, single men owe on average £19,830, which is 17 percent more than the average of £16,937 for single women.

CCCS spokeswoman Frances Walker said:

“This may be the one equality which women may not want to aspire to. Whatever sex you are, I would urge anyone worried about their debt to seek help as soon as possible.”

The report, entitled ‘Do the Right Thing’, argues that helping people to overcome their debt problems and allowing them to make repayments that suit their circumstances has clear advantages for creditors, advice agencies and those actually in debt.

Using the experiences of advisors in the free-to-client debt advice sector along with interviews with creditors, ‘Do the Right Thing’ illustrates five steps towards best practice in the debt collection industry. Firstly, they believe that it is crucial that the industry itself sets the right organisational culture. Secondly, debt collection staff need to be motivated in the correct manner. The report also states that clear and encouraging communications need to be developed and that information and support needs to be provided at all times. Lastly, the industry must be willing and able to maintain and develop best practice.

Alex MacDermott, Credit Liason Policy Officer at Citizens Advice and author of the report, said:

“Bad debt collection practices can have dire consequences and often make things worse by pressurising the person in debt to pay more than they can afford. Homes, possessions and essential services can be lost where people are persuaded to make debt repayments before paying for everyday essentials. Relationships can break down, and the health and wellbeing of families and individuals can suffer.”

“However we found from our discussions with both creditors and advisers that there are some clear steps creditors can take that will benefit everyone concerned, not just those in debt: advice agencies will be able to deal with cases quickly and efficiently and ultimately help more people; and creditors will receive sustainable repayments and waste less time and resources chasing money people simply do not have. We want to see creditors cooperate and do the right thing to help people overcome their debt problems and become valued customers once again.”

“This report sets out how we believe creditors can achieve best practice in debt collection, but now we want to hear from creditors. If you would like to help us form a best practice working group, or you want to meet with us to share your collection practices please get in touch.”

Fuel debts are up by a third

Wholesale gas prices reached £1 per therm in 2008, but have fallen back to around 38p, according to energy specialists McKinnon & Clark. Wholesale electricity prices have gone from £90 per MWh to just £37 – both falls of around 60 per cent. So annoyingly Energy bills are up while the energy companies enjoy bumper profits. Could there be a better reason to check that you’re not paying more than you have to? You can save an average of nearly £250 by getting the best deal available to you by comparing the whole of the UK energy market.

Phone debts up by nearly a third

Another household bill is causing real debt problems for many – Citizens Advice has helped nearly 19,000 people who are struggling to pay phone debts. It is going to get worse too, as from April 1 BT is changing its calling charges, and the time of its free evening and weekend call plans. From then, calls made between 7pm and 7am will be free, rather than 6pm to 6am. How many people make calls in the early morning. So do some research to get a better deal on your home phone. On the Primus Home Phone Saver you can get free evening and weekend calls to local, and national landline numbers with a line rental of £9.15 a month. Just to compare, making a 20 minute phone call each day between 6pm and 7pm is currently free on the BT off-peak charging plan. But from next month, it could add £80 to your quarterly bill. BT’s standard call rate is going up from 9.3p a call to 9.9p from April, and daytime calls will rise from 5.4p a minute to 5.9p a minute.

With the Primus Home Phone Saver, if you made calls in the day, they would be charged at 3p a minute to landline numbers. The cost of calling mobiles is a lot more, with most at 14.8p a minute in the day, 11.9p in the evening, and 8p a minute at weekends. So make sure you are not going to be calling in the day too much, otherwise this will wipe out your saving.

Overdraft problems up by a quarter

More people are living in their overdraft to make ends meet, and that has brought a quarter more people in to Citizens Advice for help. But we can help you to help yourself. Alliance & Leicester is offering a 0 per cent overdraft up to £2,000 on its Premier Current Account plus if you apply before March 7, you will get £100 to switch too.

Its Premier Direct Account is also offering a 0 per cent overdraft up to £2,000, for 12 months, so you would not be charged for going overdrawn. You have to pay at least £500 into these accounts each month though.

Even better, Bank of Scotland’s Reward will pay you £5 a month whether you are overdrawn or in credit providing you pay in £1,000 a month. Its overdraft has 0 per cent interest too, so you are effectively being paid to borrow up to £2,500.

If you are in your overdraft, you may not be able to close your account until it is cleared, so you may need to open the other account first, use the overdraft on that account to get the cash to clear your existing overdraft, then close that account and have all of your direct debits transferred over. You could always keep the two accounts open if you want. Just don’t use the overdraft in both.

The proposed changes to DROs would mean that those with very small pension pots would be able to apply for the Orders, which are a new, lower cost option for people to avoid bankruptcy.

At the same time, as part of the annual fees review, the Government announced that changes will be made to the insolvency fees structure to ensure more cash is recovered earlier in the process so that the cost is shared between debtor and creditors.

Ian Lucas said:

“Debt Relief Orders help people who would otherwise be trapped in poverty to get back on their feet. Following representations from independent money advisers, we are proposing a common sense change to ensure that vulnerable people with a very small pension pot are treated fairly. The Government will consult on this change shortly.

“We have always made it clear that we expect those petitioning for bankruptcy to pay their fair share of the cost and that the taxpayer should not be responsible for the cost of bankruptcy. That is why, as part of our annual review, we have restructured the fees arrangements.”

The new charges will come into force from April 6th and details of the fees are available at www.insolvency.gov.uk, whilst free debt advice is available through Government funded agencies such as Citizens Advice.