Debt misery hitting more middle-class households

3:05am Friday 4th July 2008

RISING mortgage, food and fuel costs are increasingly forcing middle-class families to seek debt advice, a North-East charity has said.

Christians Against Poverty (Cap) says it has seen a marked increase in middle income earners needing help since Christmas, suggesting the credit crunch is hitting a larger number of people than first feared.

Janet Hayes, manager of the Cap centre in Durham City, said middle-class debtors often have large mortgages, cars bought on hire purchase deals, credit cards and store cards.

In addition, they are struggling to pay for their children's school uniforms and trips.

Mrs Hayes said: "When we opened over five years ago, we primarily helped those at the lowest end of the wage scale.

"While we still meet with these people, we have recently seen a strong increase in the numbers of middle-class families and individuals coming to us for help too; evidence that the credit crunch and personal debt are now keenly felt by all sectors of UK society.

"Many are under threat of repossession, have been trying to sell their homes for a long period of time to clear debt and are struggling to make mortgage repayments."

Mrs Hayes said many middle-class people are ashamed of being in debt, and cannot bring themselves to tell close friends or relatives.

"We have clients who are father and son and mother and daughter but their family don't know. Middle-class clients can't hold their head up. They feel as if they've committed a crime," she said.

The UK's personal debt level has now topped £1.4 trillion. Many North-East families who held fixed-rate mortgages with Northern Rock have seen their repayments jump in recent months.

Colin Thompson, manager at Durham's Citizens Advice Bureau, said increased living costs have surprised people.

"Most people are encouraged to borrow up to their limit. Even if you left a safety net, that couple of per cent has gone."

Anyone facing debt problems is advised to get help as early as possible. Christians Against Poverty, run with Emmanuel Church, Durham, offers a free service. Call 0191-375-0148. To find your nearest Citizens Advice Bureau, visit citizensadvice.org.uk