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High redundancy figures fuel debt fears

High redundancy figures fuel debt fears

Category: Debt

Updated: 09/11/2011
First Published: 09/11/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Fears are growing that debt repayment problems could be on the horizon for thousands of people after official figures revealed almost 300,000 people have been made redundant in 2011 so far.

The Consumer Credit Counselling Service (CCCS) has raised concerns about the number of redundancies reported by the Office for National Statistics (ONS) and said many of those affected will now struggle to repay their debts.

According to the ONS, around 43% of people leaving their last job in 2011 did so as a result of redundancy, amounting to some 292,000 people.

CCCS said that redundancy and unemployment often lead to debt problems and are the biggest causes of debt problems among those seeking its help.

Last year, a quarter of the 418,000 people who sought the charity's help blamed redundancy and unemployment as the reason for their debt problem.

The charity says that these people are likely to be particularly financially vulnerable.

CCCS clients receiving Jobseekers Allowance are in the worst financial position of all those who approach the organisation, with monthly outgoings outstripping household income by £203.

Delroy Corinaldi, CCCS director of external affairs, said redundancy is a huge financial blow for those affected.

"While many will find new jobs, large numbers will not or will have a gap before they do," he added.

"This will leave them struggling with credit commitments they could easily keep up with before losing their job.

"It is important that employers work closely with charities such as CCCS to ensure that staff being made redundant are aware of the free debt advice and support that is available to help them deal with their situation and to make the best use of any redundancy payments."

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