Record numbers are seeking debt help in Scotland
According to our latest report, a record number of Scots contacted us in 2016 as they struggled to make ends meet.
We’ve found that while consumer credit arrears have decreased across the board, the proportion of our clients struggling to keep up with their rent, council tax and utilities arrears continues to rise.
Last year also represented the busiest year in the charity’s history, as almost 600,000 people across the UK used our service for help.
The key findings from the Scotland in the Red report are:
1. Record numbers are seeking debt help
Almost 17,000 clients used the charity’s telephone and online debt help service in 2016. That’s a 19% rise since 2015. While this trend is not unique to Scotland, the rise in client numbers is sharper compared to the UK average, which was 9% over the same period.
Over a five year period, client numbers have risen 69%.
2. Our Scottish clients are struggling to keep a roof over their heads
Not only are the numbers of clients with household arrears high, but they’re increasing year-on-year. The proportion of clients in arrears with their rent, electricity, gas or council tax has increased consistently since 2012.
Equally concerning is the increase over the same period of the amount owed to these arrears.
3. Council tax arrears are rising rapidly
In just five years, the proportion of clients with council tax arrears has risen from 27% to 40%. As with other key household arrears, the average owed on council tax arrears has increased 29% in the same period.
This has happened despite a 10-year freeze on council tax bills in Scotland, and is perhaps the most worrying trend in the report.
4. Renters now make up more than half of all clients
A significant shift in the housing type of Scottish clients contacting the charity has occurred between 2012 and 2016. In 2012, the 45% of clients either owned or had a mortgage on their home, while 44% were renting. In 2016, the proportion of renters has increased to 56% while homeowners not only make up 34% of our client base.
Private renters make up almost one quarter of our clients in Scotland.
What can be done?
Scotland is lucky to have effective debt legislation in the form of the Debt Arrangement Scheme, which allows some people with higher incomes to pay off their debts while their interest and charges are frozen.
But we want the Scottish Government to go further and extend the scheme to help those who have experienced an income shock — like the loss of a job — and need some time to get back on their feet before they can make repayments.
We’ll be making the case to the Scottish Government to ensure that that Scotland continues to pioneer debt repayment programmes that are responsible and give people with debt a fair chance to repay.
