Cumulative rises in day-to-day expenses, especially housing and utilities, are particularly marked among the least well-off but no-one is immune. Across the board, the 80,000-plus clients on CCCS debt repayment plans are committing a higher proportion of disposable income to basic living costs, irrespective of income.

These trends carry significance beyond the immediate consequences of tipping more of the over-indebted into insolvency according to CCCS chairman, Malcolm Hurlston. He says:

"Our clients represent the tip of the iceberg. Their budgets have been pared to the bone; if they are paying more for day-to-day living the impact of these rising costs will be manifold on the rest of the population."

"Even if consumers reduce fuel consumption, they will still have to commit an increasing proportion of their disposable income to paying utility bills - and this is before the double percentage increases announced earlier this year have dipped into the household purse."

The report shows that spending on essentials varies according to income: clients below the poverty line are spending less on housing, reflecting the fact that only eight percent are homeowners, while high-income clients, 64 percent of whom are homeowners, are spending an increasing proportion of income on housing, 44 percent last year compared with 34 percent in 2003. The average housing cost for this group has risen from £448 to £776 per month.

Utilities are the only category where expenditure has risen every year for the last four years for all income groups.

Unsurprisingly, the increasing burden on household budgets is forcing clients to economise in other areas. In particular, poorer clients have cut spending on insurance by almost five percent each year for the last two years, in marked contrast to one of the aims of the Financial Inclusion Taskforce to increase insurance protection among the less well-off.

As well as analysing the impact of rising costs on clients' capacity to repay their debts, the Statistical Yearbook examines in detail the circumstances of over 250,000 people who sought the help of the CCCS in 2007 as well as 80,000 clients of the charity on debt repayment plans.

The main findings are:

• Debt levels are declining across the board, irrespective of age, sex or income;
• CCCS clients are getting older and poorer: in 2007 for the first time, more than half (52 percent) were over 40 compared with 44 percent in 2005. Three quarters live in households with take home pay of less than £20k, and almost a third earn less than £10k;
• Debt levels are dropping fastest for the under-25s with the average debt now under £10,000 (£9,656);
• For the first time, clients over 60 have the highest levels of debt, averaging £29,642.

CCCS provided free, expert and independent counselling for 140,000 people in 2007, just over half of these were online through CCCS Debt Remedy. Clients repaid over £194m through the charity to their lenders, 38 percent more than in 2006.

Copies of the CCCS Statistical Yearbook 2007 are available online from www.cccs.co.uk or from the press office.

-ends-

For further information contact:

Frances Walker 020 7636 5214 fwalker@hurlstons.com

Notes for editors:

1. The information in the Statistical Yearbook is obtained from CCCS' data warehouse which contains data on 250,000 people, drawing on counselling sessions, clients' DMPs and contact with banks and other lenders. Every day 50 million rows of data are updated on the warehouse, providing a unique and anonymised chronicle of the circumstances of the over-indebted
2. CCCS is self-funding. Lenders share with the charity the benefit they receive from its operation, making a donation from the money repaid to them. This allows CCCS to retain its independence and ensure that its advice is always in the best interest of the client. CCCS aims to separate the "can't pays" from the "won't pays".
3. As well as debt advice and counselling, specialist help is available on related problems such as bankruptcy, welfare benefits and repossessions. There is a dedicated helpline for the self-employed.
4. CCCS Debt Remedy is available around the clock on www.cccs.co.uk. Telephone helplines are open 8am-8pm, Monday to Friday on freephone 0800 138 1111.

March 19 2008