More driven to debt advice by cuts

Housing benefit cuts could end up requiring more people to seek debt management, with warnings of areas becoming "ghettos".

According to government figures, housing benefit will be limited to £280 a week for a flat and £400 a week for a house, after the cost of payments had soared to £21bn over the last decade.

However, the British Property Federation (BPF) has warned that the cuts would lead to "real life personal tragedies" as people in debt have to find extra money to pay for a roof over their heads.

The cuts amount to an average of £12 for over 900,000 (936,960) people, but Liz Peace from the BPF warns that this is still a significant figure.

She remarks that "people may think that £10 to £15 per week may not sound a lot, but for those on housing benefit it will mean many have to up sticks and move the family home, because they cannot afford it anymore."

Kevin Still, director of Atlantic Financial Management, says: "Increases in the essential cost of living and reductions in income are causing major debt problems for millions of UK households, not just those reliant on housing benefits.

"At the lower end of the income scale this may lead to more personal insolvencies and probably an increase in the number of Debt Relief Orders (DROs) where recipients of housing benefits have very limited tangible assets."

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