JANUARY is a time of new beginnings and change, but for many people the personal financial struggles and worries of years past continue. At Citizens Advice Edinburgh, we are acutely aware that the recent positive narrative around national economic growth masks a deep and sustained cost-of-living crisis on the ground.
With falling real incomes and the increasing costs of basic life essentials, many people – especially the most vulnerable in our communities – are accumulating truly staggering levels of problem debt.
Personal debt across the UK now stands at a history-busting £1.4 trillion. While this figure includes mortgage debt, a considerable chunk of this near-unfathomable indebtedness is made up of consumer debt.
At £158bn, the current level of borrowing for personal and household goods and services is three times the figure recorded in 1993.
Rising food prices, crippling fuel bills, and high housing and transport costs are having a negative impact on almost all of us. Increasingly, we are a nation reliant on credit to satisfy not just our wants but also to meet our daily needs.
Looking at 2014 and beyond, the Resolution Foundation has projected that more than one million homeowners could be at risk of defaulting on their mortgages and eventually losing their homes if interest rates rise by only a small percentage.
The picture is one of individual finances alarmingly vulnerable to slight increases in the cost of borrowing and drops in income.
Problem debt and perilous financial situations have a wide and diverse range of causes, but we do know that the cycle of unsustainable debt has an enormous impact on our wellbeing.
Our charity sees thousands of people each year for whom the personal struggle with debt has led to or worsened other interlinked problems – family and relationship breakdowns, job loss, ill health and addictions to name but a few.
The good news, however, is that if you are struggling with your finances, then there is a lot that you can do to improve or resolve the situation, and our volunteers can help.
Last November, the Money Advice Service published figures showing that nine million people in the UK are struggling with serious debts – but, crucially, only 1.5 million of these people have sought help from advice agencies.
If you are worried about debt or if you have difficulty paying your bills, then you can visit Citizens Advice Edinburgh, or the local Citizens Advice Bureau in your community, where you will receive impartial, practical advice and support from our expert volunteers.
We will look at your personal situation, see if you are entitled to any financial help and work out a way forward.
We can also help with any other worries or challenges related to your finances. Do not delay in seeking solutions; the earlier you come to see us, the better.
At this time of year, many families especially dread the January bills dropping through the letterbox. It’s easy in the run-up to Christmas to delay sorting out your finances.
The important thing is not to panic when the bills come through. Many people are tempted to either ignore the problem altogether – this means you run up late payment charges – or are tempted to temporarily solve the problem by borrowing more on credit cards, bank overdrafts or, worse still, via high interest pay-day loans. Neither of these steps is the right solution, but it can be difficult to take a step back and see all the options yourself.
At Citizens Advice Edinburgh, the first three months of the year are one of our busiest times and every day our dedicated volunteers see people who are struggling with their household income and outgoings.
Most people are feeling the pressure at the moment – there is no shame in seeking help. Our advice is free, confidential and completely impartial.
So, don’t struggle alone. Come and see us and we will do what we can to help you through these tough times. If you have friends, family or colleagues who may be struggling with their bills, then pass this information on so that they, too, can get all the help they need to resolve their problems.
• Moira Tasker is the chief executive of Citizens Advice Edinburgh