Norfolk in the grip of a financial crisis

Thousands of people in Norfolk are in debt

Thousands of families across Norfolk are on the brink of financial ruin, with the recession taking an increasing toll on household budgets.

But as well as the growing number of people facing serious problems, debt experts have suggested that up to one in three people in the county have some sort of financial issue that needs addressing, ranging from simple budgeting issues through to being on the verge of having a home repossessed.

People struggling with non-mortgage debts of £40,000 or £50,000 are not rare, but one debt counsellor has told of his experience dealing with one man whose initial £25,000 loan quickly ballooned to £165,000, with further loans being taken out each month just to pay the interest.

The worrying figures come as support groups such as Citizens Advice brace themselves for further misery in the coming months, with unemployment figures continuing to rise and more people likely to find themselves unable to meet their financial commitments.

The extent of the problems was laid bare last night at a meeting held by Norwich and West Norfolk Citizens Advice.

The bureau, which was formed two years ago with the merger of the former Norwich & District and West Norfolk services, has offices in Downham Market, King's Lynn and Norwich, and also runs a number of outreach services. It has dealt with 56,000 people over the past 12 months - a rise of 15pc year on year - with more than more than 40pc of those people making contact because of debt problems.

Not all of them were “on the brink” in terms of financial difficulty, but a large proportion of them were at the point where they could no longer meet their commitments.

It is likely, however, that those figures are just the tip of the iceberg. Andy Cobb, manager of Debtline, part of the CAB, estimated that only one in 10 people with debt problems made contact with the bureau, meaning that the real number of people in Norfolk who need to take a look at their finances or budgeting is nearer the quarter-of-a-million mark.

The experiences of the team in Norwich and West Norfolk have been reflected elsewhere in the region. For example, the North-East Suffolk CAB, which covers, Beccles, Bungay, Halesworth and Lowestoft, recently revealed that it had seen a 15pc increase in the number of people it had seen compared with the previous 12 months, and those people had raised more than 20,000 issues - an increase of 40pc year on year. Again, about four in 10 problems the bureau dealt with were related to debt.

Steve Wiseman, chief executive of the Norwich and West Norfolk bureau, said it had been a “rollercoaster” year, and the problems had been mounting up.

“Our clients have faced the credit crunch, followed by inflation rising and then falling. Then there was the recession and the big increase in job losses. A lot of people have been put through the mill and have been brought to the brink,” he said.

“There has been a fluctuation of economic indicators and the cost of living, and many people have been in fear of losing their jobs.

“A lot of people have not been able to get credit and they have also seen the equity in their houses fall as property process have fallen.

“Many people have just been maxed out and they have got to the stage where they just can't balance their budgets at all. The economic crises have brought many people to the brink of financial ruin.”

Mr Wiseman added that while people's expenditure and borrowings were broadly the same as elsewhere in the UK, the fact that wages in Norfolk were 85pc of the national average meant people in this part of the world were more susceptible to getting into financial difficulty than some other parts of the country.

Last night's annual meeting - which included an address by Baroness Patricia Hollis - was held during the 70th anniversary of the Citizens Advice network.

“Our services and casework reflect current needs, issues and concerns, as we are often the first port of call,” said Mr Wiseman.

“This has been the case from our beginnings 70 years ago, when Citizens Advice Bureaux around the country were set up to deal with problems arising from enemy action and wartime austerity.”



Nipping any problems with your finances in the bud can pay dividends later on.

That's the message from the experts at Citizens Advice, who have warned that the later things are left, the harder it can be to unravel them.

However, Andy Cobb, the manager of Debtline at the Norwich and West Norfolk CAB, said it was never too late to ask for help.

Mr Cobb gave the example of one man he had dealt with recently who had debts of £165,000, not including his mortgage. The client had credit cards and personal loans with 42 creditors, and all 42 creditors had passed the debts on to an average of three third parties. That meant there were about 120 bills that needed dealing with every month.

Things had deteriorated to the point where a further £3,000 loan was being taken out every month simply to service the existing debts.

However, Mr Cobb and his team worked with the man to cut his monthly mortgage payments, prioritise his debts and come up with a repayment plan that was acceptable to all parties. From a seemingly hopeless position, the man found himself back on his feet and in control of his money relatively quickly.

“There are always plenty of options, and that really is the over-riding message,” Mr Cobb said.

“Some people commit suicide because of their debts, but there's nothing we can't sort out if you come to us.”