A recent report highlights the importance of benefits for households in debt and those on low incomes.
The Governmentís plan to reduce eligibility for many benefits as such is likely to worsen financial problems for these groups of people, the Consumer Credit Counselling Service (CCCS) warns.
The Office for National Statistics (ONS) showed low-middle income households struggle to stay afloat with their current level of debt, and for 55 percent, benefits and tax credit help them achieve this stability.
ìThe ONS report highlights the importance of benefits to household incomes,î said Delroy Corinaldi, CCCS external affairs director.
ìThis importance is heightened when a household, whatever its income, is weighed down by debt.î
According to the CCCS, benefits account for on average one third of their clientsí income, and the extent of this differed between the types of benefits they were receiving. The average share of income for those seeking Jobseekerís Allowance was 46 percent for example, while Incapacity Benefit was 37 percent.
The average monthly income for their clients claiming Child Benefit is £1,824.52 compared to £965.11 for those on Income Support and £607.91 for those on Jobseekerís Allowance.
With an impending base rate rise, those who are in debt are advised to pay as much as they can off before an interest level rise makes it less affordable to do so.
Debt management and debt consolidation loans can be a suitable way to get out of debt, depending on your financial situation.
Usually debt consolidation loans are sought by those who have accumulated debt from a number of different areas and are finding it difficult organising their repayments. A debt consolidation loan will pay off all your creditors so you then pay back the loan provider, plus interest, but through only one repayment.