There appears to be a consensus that personal debt, and indeed over-indebtedness, in the UK is a growing problem. The Citizens Advice Bureaux in England and Wales dealt with 8,465 new debt problems every working day during the year ending June 2012 (Creditaction, 2012). Recent years have evidenced a steady stagnation in real terms wages and recent research suggests that the main cause for falling into debt has been a fall in household income.
While worry about the implications of over-indebtedness (eg. failure to be able to maintain payment for essential living expenses, such as food, rent and bills) is clearly important, it is also clear from our data that debt clients frequently feel humiliated, disconnected and entrapped, with the processes of debt collection having a clear impact on people’s mental health.
This research project analysis drew on data collected from a range of stakeholders in the UK credit industry.