JSA claimants &quotensnared&quot by unsecured debt

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The Consumer Credit Counselling Service (CCCS), says huge numbers of people claiming Jobseeker’s Allowance (JSA) owe thousands of pounds in unsecured debt that they have no chance of repaying.

Figures from the UK’s largest debt charity show that one in eight (14,446) people who contacted the charity during the first half of 2010 for help with their unsecured debts were claiming JSA.

On average, clients claiming JSA owe £15,412 to five different creditors. If, for the purposes of illustration only, they were to spend their entire weekly JSA payment on repaying their unsecured debts it would still take them over four and a half years to become debt free, and even then only if the interest on their debts had been frozen.

The proportion of people in debt (CCCS clients) claiming JSA is almost three times higher than in the general population.

Over the first six months of 2010, almost a quarter of people contacting CCCS (22.4%) cited unemployment as a reason. This is again completely disproportionate with the level of unemployment across the UK (8.0%).

CCCS chairman Malcolm Hurlston said: “There is a causal link between unemployment and debt. Unemployment can devastate the finances of any family and our experience shows that once somebody with few financial options is forced to take out a loan to cover living costs they are often then trapped in debt for years to come.””

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