Recession 'has created a financially excluded generation'

The recession has created a generation of people who are financially excluded and laden with debt, it has been claimed.

Teresa Perchard, director of policy at Citizens Advice, told attendees at the Northern Money Conference 2010 that fuel poverty and rising bills have "grown almost uncontrollably" over the past two years and this has created a section of the community that has had to borrow to get by, but as these debts have mounted it has become increasingly difficult for them to make payments.

She commented: "Water debt [and] utility debt have all been going up over the last year and that is creating a new generation of financially excluded people."

According to Credit Action, average household debt in the UK was £8,939 (excluding mortgages) in January. However, this figure increased to £18,623 if the average was based on the number of households who actually had some form of unsecured loan.

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The cost of making phone calls from landlines has increased, one organisation has said, which could affect those struggling with debt management.

A quarter of Britons are worried about the possibility of a rise in the base rate, according to one study, which could negatively affect those with debt management problems.

More people could face bankruptcy as unemployment rises, it has been claimed.

Cuts to housing benefits will affect hundreds of thousands of people, one organisation has claimed, which could include those struggling with debt management.

Anyone looking to remortgage their home to deal with debt management issues may struggle because of the falling house prices.

People claiming Jobseeker's Allowance are finding it difficult to keep on top of their debt management responsibilities, it has been claimed.

One of the signs a person may be struggling with debt management is that they only ever make minimum repayments on their credit card, one organisation has said.

Debt management problems in the UK could still be prevalent after new figures from the Bank of England showed record amounts of write-offs for credit cards.

There was an increase in the number of people looking for debt management advice from Citizen's Advice Bureaux in the first three month of 2010.

Filing for bankruptcy in cases of financial difficulty may not necessarily always be the easy option.