As a result of steep increases in the cost of energy and food and rising unemployment, the number of people struggling with debts has surged over the last 12 months.

The Government-funded National Debtline said the number of calls increased from around 16,000 a month a year ago to 23,000 in November.

According to Paul Mullins, chief executive of the National Debtline, the surge in calls is primarily due to the lack of cheap credit deals, meaning consumers are unable to remortgage their property or take out a secured loan or unsecured loan for debt consolidation and are instead looking at a debt management plan or an IVA (individual voluntary arrangement) as an alternative solution.

The figures indicate how the global financial crisis is having a major impact on family finances, who are suffering under a mountain of debt.

The problem is expected to deteriorate over the next 12 months as the UK enters a recession and unemployment is set to reach levels not seen since the early 1990s.

However, there are plans for a further £5.85 million to be allocated to National Debtline to help it handle the extra demand.

Consumer minister Gareth Thomas said those struggling with debt must seek assistance as soon as possible. Debt advice organisations can make a difference when it comes to resolving debt problems.

In related news, the Council of Mortgage Lenders anticipates that approximately 45,000 people had their homes repossessed in 2008, and the number is expected to rise to record levels during 2009.

Posted 13/05/2009 17:58:28