Poverty rise may see debt help need jump

The level of poverty among adults of working age has risen to record levels, according to new government figures.

Department for Work and Pensions data for 2009-10 – Labour’s last year in power – showed there were 5.7 million adults of working age below the poverty line before housing costs are taken into account, 16 per cent of the total.

And when such expenses are considered, the figure soars to 22 per cent, or 7.9 million.

Work and pensions secretary Iain Duncan Smith commented: “These figures lay bare the growth of income inequality in the UK which is now the highest it has ever been.”

He argued that the problem was a tax credits system that made worklessness and living off benefits endemic, arguing reforms to this system are imperative to get such people working again.

It may be that many of those in such poverty, however, are also in deep debt and while those who can get jobs may find this eases the situation, debt management plans may still be needed.

However, a report in the Guardian has indicated it is not just those at the bottom end of the income scale who are struggling and getting into trouble because they owe money, as many people who were previously quite affluent are in trouble over private school fees.

It noted many of the institutions have been using debt collectors to deal with arrears run up by many parents who are suddenly strapped for cash and less able to afford the cost of such education for their children.

The paper quoted spokesman for the Credit Services Association Sean Feast as saying many parents were being “caught in a web of debt” and some of these were people who had never been in this sort of situation before.

By James Francis