Debt burden of those on JSA
Figures released the Consumer Credit Counselling Service (CCCS), have revealed that huge numbers of people claiming Jobseeker's Allowance (JSA) owe thousands of pounds in unsecured debt that they have no chance of repaying.
The charity's figures show that one in eight (14,446) people who contacted the charity during the first half of 2010 for help with their unsecured debts were claiming JSA.
On average, clients claiming JSA owe £15,412 to five different creditors. If (for the purposes of illustration only, as no-one would actually do this) they were to spend their entire weekly JSA payment on repaying their unsecured debts it would still take them over four and a half years to become debt free, and even then only if the interest on their debts had been frozen.
The proportion of people in debt (CCCS clients) claiming JSA is almost three times higher than in the general population.
One of the reasons for their debt problem is unemployment. Over the first six months of 2010, almost a quarter of people contacting CCCS (22.4%) cited unemployment as a reason. This is again completely disproportionate with the level of unemployment across the UK (8.0%).
Commenting, CCCS chairman Malcolm Hurlston said: "There is a causal link between unemployment and debt. Unemployment can devastate the finances of any family and our experience shows that once somebody with few financial options is forced to take out a loan to cover living costs they are often then trapped in debt for years to come.
"Thousands of people claiming Jobseeker's Allowance are ensnared by unsecured debt and their needs demand specific study. Government must be mindful of how welfare cuts will affect those living off benefits and move to ensure they are not damning huge numbers of people to a lifetime of debt."
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