Number of people seeking mortgage arrears advice 'up 50%' » Bill payments » 24dash.com

The number of people seeking help after falling behind with their mortgage has soared by more than 50% during the past year, figures showed today.

Charity Citizens Advice said it had seen a 51% surge in people contacting it because they were in arrears on their mortgage or a secured loan during the three months to the end of September, compared with the same period last year.

There was also a 10% jump in people contacting it because they were unable to keep up with payments on their fuel bills.

Overall during the past 12 months, staff in bureaux in England and Wales have seen a 35% rise in people with mortgage and secured loan arrears problems, receiving 77,324 new enquiries since October last year.

But the charity said there had been a small reduction in the number of people contacting it because they were struggling with unsecured debts, such as credit, store and charge cards and unsecured loans.

These enquires have fallen 4% year-on-year, although the area still accounts for the largest proportion of debt problems Citizens Advice deals with, at 35%, compared with 5% for mortgages and secured loans and 4% for fuel debt.

Nearly half of the people who contacted the charity for help with debt had dependent children and 18% were single parents. One in 10 people had a long-term health problem and 13% were disabled.

Research carried out by Citizens Advice earlier this year found that the most common reason people gave for falling into mortgage arrears was losing their job or the failure of their business, at 20%, while 17% attributed their problems to ill health and 16% blamed them on a relationship breaking down.

The group also found that people were an average of four months in arrears when their lender started repossession action.

David Harker, chief executive of Citizens Advice, said: "While we are pleased to see the number of consumer credit problems going down, the increase in the number of enquiries about basic essentials is worrying and these figures show how the current economic situation is hitting vulnerable and low-income households the hardest.

"To prevent this situation worsening, it is vital that mortgage lenders and fuel companies do everything in their power to help people in arrears to come to a workable solution over repayment arrangements, rather than piling on extra charges."

He also urged people who were worried about debt to get advice as soon as possible.

Meanwhile, research carried out by independent financial adviser website Unbiased.co.uk showed that for every £1 Britons saved during the second quarter of the year, they borrowed 15p.

The so-called savings brake was higher than during the second quarter of 2007, when people borrowed 12p through unsecured debt for every pound they saved, but well down on the 67p they borrowed for every £1 saved during the previous three months.

Overall, people managed to collectively save £38.51 billion during the three months to the end of September, less than the £42.96 billion they saved during the same quarter of 2007, but more than the £32.93 billion set aside during the previous three months.

At the same time, the amount of unsecured debt people took on tumbled to £5.95 billion in the second quarter, down from £22.06 billion in the first quarter, which was the highest figure for four years.

David Elms, chief executive of Unbiased.co.uk, said: "With the credit crunch firmly gripping financial markets, it is now more important than ever for consumers to take control of their finances."