According to Citizens Advice, a sharp increase has been reported in the number of people looking for help in managing their money as they found that they have taken on large amounts of credit which they are unable to pay back, reports the Press & Journal. The advice service claims that former council property tenants who are now new homeowners, as a result of purchasing their house from local authorities at a heavily discounted rate, have used their status to get access to various forms of borrowing including personal loans and credit cards.

Such consumers were revealed to have used their property as a means of securing credit to carry out home improvements, despite many of these generally being on incomes of around 10,000 pounds. Now people throughout northern Scotland have found themselves owing large amounts of money to creditors. Meanwhile, the Aberdeen branch of the financial services firm has advised about 500 adults over the course of the past year who have "severe money problems" totalling 6.8 million pounds.

Commenting on the news, Mari Pienaar, money advice worker, told the publication: "We have found that many clients spiralled into debt only when they purchased their council house which then meant that they were offered credit from more sources. Unused to the spending available, they soon found that in addition to their normal running costs, the credit repayments took them in excess of their income. I have seen many cases of people who did not have any debt prior to buying their council houses."

Meanwhile, a spokesperson for the advisory service claimed that such difficulties in managing money are likely to be seen across Scotland, as debt is the largest single issue that Citizens Advice staff in the principality deal with. Over the course of last year, the organisation offered advice to members of the public owing more than 211 million pounds.

However, as a means of reducing financial pressures felt in paying back secured loans and credit cards, Communities Scotland - a Scottish government agency - has created a "mortgage-to-rent scheme". Here those who are in danger of having their homes repossessed sell their property to social landlords before renting it back from them at a low-rate. Yet a spokesperson for the Scottish executive claimed that the programme "should be seen as a last resort and is not a substitute for financial prudence by homeowners".

For those concerned that their inability to keep with loan repayments costs, in addition to various other strains on their finances, may cause them to get into arrears, a debt consolidation loan could be an advisable method in which to reorganise a monetary situation. Stephen Rose, director of Debt Advice Bureau, suggested earlier this year that by refinancing all existing outgoings into one monthly repayment borrowers could be paying money at a much more competitive rate of interest. He also reported that consumers should draw up a budget to identify where any areas of unnecessary expenditure can be cut.