Middle Class Debt On The Rise

Community Money Advice, a charity offering debt advice across the country has reported an 85% rise in the number of people seeking debt advice in the past year.

And the biggest rise has been seen among the middle classes. Transact is a national company forum which represent more than 1000 organisations that advise on debt and finance.

Speaking on the rise in people seeking debt advise, Jamie Elliot of Transact said “The rise is huge because of the big increase in middle class debt.”

She discussed how “the face of debt has changed. Historically, is used to be mainly people on benefits and people in social housing who went to debt advice agencies. Since the credit crunch started, there has been a big increase in professionals and home-owners coming for help - you just didn’t see these people before at all.”

Heather Keats, director of Community Money Advice, has also seen a change in her clientele, “We are seeing a new type of client. Teachers, police and banking and service sector workers, many of them homeowners, are struggling with mortgages, secured loans, and credit card debts.”

Indeed, figures show that many on very comfortable incomes have amassed alarming amounts of debt. One retired bank manager with a pension of £40,000 was struggling with £100,000 worth of debt when he sought help.

A television producer who came to one of Transacts organisations for help was earning a high salary of £70,000, but had managed to acquire over £50,000 of debt.

“The message is that people need to stop borrowing and start saving,” said Mr Elliott. “There needs to be a culture change and people need to live within their means.”

Carys is an author of several articles pertaining to Debt. He is known for his expertise on the subject and on other Business and Finance related articles.