GROUPS in Furness that help people in debt have seen a big increase in the numbers they see as a report reveals a wage freeze is causing more households into poverty.

A study published by the TUC and Unison found 3.2 million households are in "problem debt", paying out more than a quarter of their income on unsecured debt repayments.

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The problem has got so bad in Barrow that 43 per cent of the work done by Citizens Advice in the borough is on resolving debt problems.

Threefold local increase


Christine McKinlay, chief officer at Barrow Citizens Advice Bureau Christine McKinlay, chief officer at Barrow Citizens Advice, said: "We have seen a threefold increase in the level of unsecured debt for those people who have sought our help.

"The ratio of income to levels of debt is increasing, often because wages and benefit rates have fallen in real terms.

"People have very little disposable income to meet even minimum repayments when the daily struggle to meet even the most basic costs have risen.

"Creditors are quick to apply charges so levels of debt escalate within a very short time."

The TUC/Unison report blamed a collapse in wages for the increase in household debt and spending on loan repayments, citing a fall in real-terms take-home pay by 10 per cent between 2007 and 2015.

Increasing numbers of families are relying on credit cards and loans to get by due to not having enough money in the bank to cover basic costs.

High interest charges


Dennis Laird, chairman of Barrow Credit Union Dennis Laird, chairman of Barrow Credit Union, said it wasn't just people on low incomes that the problem was affecting.

He said: "Those on national minimum wage, or out of employment and in receipt of benefits are finding it increasingly hard in this time of huge public spending cuts.

"We have just over 1,000 members, and have an increasing number coming in for loans to consolidate debts. The problem doesn’t just affect the low paid however.

"Some of our members have built the debt up over an extended period, and do not seem to realise that servicing the debt takes a large amount of their weekly or monthly disposable income.

"Although the bank base rate is at an all-time low, the rates of interest charged by some lenders is many times higher, and if only the monthly minimum payment is made, in some cases the debt will never be cleared."

According to the 'Britain in the Red' report, total unsecured debt, excluding mortgages, for UK households increased by £48 billion in the three years to 2015. The findings show 1.6 million households were in "extreme problem debt", shelling out 40 per cent on repayments.

Advice from Barrow Citizens Advice

- People need to get help as early as possible and to make sure that the advice is being given by accredited, licensed experts by the Financial Conduct Authority.

- Residents with debt problems can call the Citizens Advice Bureau on 0344 488 9624 (local charges apply) or visit the office in Abbey Road.

Advice from Barrow Credit Union

- The Credit Union exists to serve its members, and should be the first port of call for those who are starting to experience financial problems, rather than payday or doorstep lenders, many of whom are unregulated.

- There are some members at Barrow Credit Union in permanent employment who are taking advantage of their 'Flexiloan' product to consolidate debts at a rate of interest that is very competitive with big name high street lenders.