Search

Credit union to solve debt crisis?

PUBLISHED: 07:00 02 February 2008 | UPDATED: 12:15 07 May 2010

Plans to establish a credit union to help alleviate the rising debts of people in the county have been mooted by the city's Citizen's Advice Bureau.

Over the past 20 years the average debt of a family has risen from £1,800 to £35,000, with low income groups being the hardest hit with extensive loans and debts racked up on credit cards.

Plans to establish a credit union to help alleviate the rising debts of people in the county have been mooted by the city's Citizen's Advice Bureau.

Over the past 20 years the average debt of a family has risen from £1,800 to £35,000, with low income groups being the hardest hit with extensive loans and debts racked up on credit cards.

A major conference to tackle the problem was held yesterday in the city by Norwich and District Citizens Advice Bureau, along with Norfolk Trading Standards and Norwich Consumer Support Network in an attempt to help people deal with their huge financial burdens.

One of the proposals to help solve the debt problems is to establish a credit union specifically for people in Norfolk to provide them with access to high quality financial services based on secure savings and low cost loan facilities.

Steve Wiseman, chief executive officer of Norwich and District Citizens Advice Bureau said: “Debt is crippling people living locally and it is time we did something about it.

“People are borrowing far too much money and getting things on credit cards which they cannot pay back. The situation has got out of control.

“This conference was a way of finding out what can be done to make things better. One of the options is to look at a credit union to help those in such a lot of debt that they don't know how to get out of it.

“We are looking at improvements in the way credit firms manage customers but also to inform customers in Norfolk about other choices they have.”

In 1989 the Bureau hosted a conference on debt issues at the time, and the work of the then Bureau Money Advice Unit. Then, average indebtedness stood at £1,800 per family. It is now £36,000 per household, excluding a mortgage.

Since then, personal debt has soared to the highest level in UK history. The nation's “indebtedness” now exceeds £1.38 trillion, of which £217 billion is unsecured consumer debt. Credit card debt alone has jumped from £10 billion to £54 billion over the past 10 years.

Credit unions are community enterprises, set up for and by people who live or work in the area and seek to “make a significant anti-poverty impact”, especially in areas of social deprivation and financial exclusion - as well as providing access to financial services for all the community.

Credit Unions are 'not-for-profit' organisations and most employees are unpaid volunteers. Members' savings are placed in secure investments of low risk. Savings put into a credit union are as safe as those in banks or building societies because they are regulated by the Financial Services Authority.

Mr Wiseman added: “The objectives of the conference are so we can look at helping priority creditors dealing with arrears cases and to provide a charter of proposals for lobbying purposes in order to improve the situation of people with debt problems.”

Speakers at the conference at Carrow Road included Charles Clarke, MP Norwich South, Norman Lamb, MP North Norfolk and Davie Philpott, deputy director of markets and projects at the Office of Fair Trading.

Several workshops were held in consumer credit and the law, social landlords as creditors and financial capability for consumers.

Have you been saddled with an enormous debt? Call Sarah Hall on 01603 772426 or email sarah.hall2@archant.co.uk

Most Read

Most Read

Latest from the Norwich Evening News

Hot Jobs

Show Job Lists