Financial difficulty ahead as inflation increases

17th January 2017

The Office for National Statistics (ONS) has published UK consumer price inflation statistics for December 2016, which show that inflation rose by 1.6 percent in the year to December 2016, compared with a 1.2 percent rise in the year to November.

Commenting on the statistics Joanna Elson OBE, chief executive of the Money Advice Trust, the charity that runs National Debtline, said “We are seeing the beginnings of another slow but powerful squeeze on household budgets – and we are likely to see an increase in financial difficulty in the UK as a result. For households who are already in a precarious financial position, the risk is that this new squeeze could tip many into problem debt. Rising costs in food, fuel and clothing in particular will add to existing pressures more generally, and we can expect to see a higher level of arrears on everyday household bills, in particular.”

“Demand for debt advice is already surging this year, with National Debtline seeing a 17 percent jump in calls compared to last January and a 55 percent rise in the number of people seeking advice online. This demand is likely to continue to grow, in a year that many households could find more difficult than they expected. It has never been more important for government, advice agencies and lenders to work together to make sure people get the help they need.”

 Calls to National Debtline in the first eight working days of 2017 are up 17 percent compared to the same period in January 2016, with the number of people seeking online advice from the service rising by 55 percent so far this year.

National Debtline advised 8,635 people by phone from 3rd to12th January, compared to 7,381 in the equivalent period last year. In the month to 12th January, 22,581 people went online for advice from National Debtline, compared to 14,583 in the equivalent period last year.