More people seeking help over debt

THE number of people contacting a debt charity for help rose during January as consumers took stock of their borrowings in the face of rising interest rates.

The Consumer Credit Counselling Service said it had seen a 12% rise in the number of people contacting it compared with the same month the previous year.

It said the increase in calls was surprising as January was usually a quiet month, and attributed it to a combination of rising interest rates and widespread press coverage encouraging people to be more pro-active about debt.

The group added that people may also have been spurred into action by the prospect of a widely predicted interest rate rise in February, following November's increase in the cost of borrowing.

During the final three months of 2003 the group said it saw a 6.7% increase in the number of people having problems keeping up with debt repayments compared with the previous quarter, although it added that this was usual for the time of year.

At the same time it said the average debt of someone entering a debt repayment plan, under which interest is frozen in exchange for people paying back a set amount each month, reached £24,800, up from £24,138 during the final quarter of 2002.

It also said this was the smallest annual increase since records began in 1998.