A charity has called for benefits to be uprated in the midst of the cost of living crisis, with people unable to pay off their debts.
In a new report, Citizens Advice Scotland warned that those with outstanding payments are facing the prospect of being “trapped” due to rising household bills.
The report evaluated the experiences of almost 3,000 people with complex debt – where someone has multiple debts to different creditors or a single liability requiring specific legal or administrative work.
Those with complex debt are receiving help from the charity, which has raised concerns over the number of clients struggling with finances over the last year, before significant inflation and bills increases.
In an analysis by the charity of its 3,000 complex debt clients, one in two were found to have no money to pay down their debts after covering the cost of essentials.
There was also a reduction of £80 in monthly disposable income for those clients who did have it.
The charity also reported a huge increase in the number of people taking longer to clear their debts, with a rise of 65% in people taking between five and 30 years to do so.
Citizens Advice Scotland has said that the findings that the cost of living crisis impacts people in debt far sooner than the rest of the population.
It also underlined the impact of the decision to remove the £20 uplift in Universal Credit which was set out by the UK Government during the coronavirus pandemic.
Jemel Benison, CAS financial health spokesperson, described the findings of the report as “shocking” as he urged politicians to look at the support available.
“People in debt face the prospect of being trapped into longer repayment periods because of the cost of living crisis,” said Benison.
“The findings of this report are shocking and should have policy makers considering what more support can be made available.
“What we see is more people with no money left every month not able to pay down their debt so facing longer periods to clear it.
“Those with disposable income every month have seen a huge drop just as prices and bills soar.”
Benison urged decision-makers to look at uprating benefits to help those struggling.
They continued: “This data is from Spring 2021 to earlier this year, so people in debt were already feeling the impact of the cost of living crisis.
“If the worst is to come in terms of inflation or a recession, that is very worrying indeed.
“What is also clear is that the decision to cut £20 per week from Universal Credit has had a devastating impact on those in debt.
“It reiterates the essential need to uprate benefits in line with the cost of living at least.”
Benison added: “People feeling worried about their finances can always turn to the Citizens Advice network for help.
“Our advice is free, confidential and impartial and can deliver real results. We never charge people for advice and we don’t judge, we just help.”
A Department for Work and Pensions spokesman said the UK Government was “determined to support the most vulnerable with the rising cost of living and we are providing £1,200 in direct payments this year to over eight million low-income households across the United Kingdom, as part of our £37bn support package”.
“As is the usual process, the Secretary of State is currently conducting his statutory annual review of benefits using the most recent prices and earnings indices available,” he added.