It has been claimed that the recent cuts that have been outlined by the coalition government will result in personal debt levels soaring. The government recently outlined its comprehensive spending review, which included huge cutbacks in the public sector, which will then have a knock on effect on parts of the private sector, increases in VAT, cuts in welfare and benefits, and other measures that are designed to reduce the public deficit.

The Consumer Credit Counselling Service has said that the various cutbacks that have been put forward by the government will result in many people struggling with their finances, and will most likely result in a huge increase in the number of people that are experiencing problems with their personal debts.

The charity said that of all of the people it helped last year only 25 percent had been able to pay off their borrowing, and this trend had continued over the course of this year. Many state workers will find themselves in a position where they are struggling to repay their debts due to the sweeping job losses, and this could also affect many private sector workers who are affected by the cutbacks.

The charity also said that many of the people that are expected to seek help with their debt problems later this year and into next year are likely to be people that had been repaying their debts okay up until now but would struggle as a result of losing hours or losing their jobs.

Officials from the CCCS said that anyone that does find themselves in a position where they are struggling with their debt should ensure that they contact a charity such as the CCCS rather than going to a debt company that charges for advice and assistance.