Church-based debt counselling grows as households feel squeeze on income

The counselling centres are being set up in local churches, where volunteers have been trained to restore hope and help people find a way out of their debts.

The expansion reflects the scale of the need, with the total number of CAP debt counselling centres now standing at 160 across the UK.

In addition to the new centres, four existing centres have taken on extra debt coaches to cope with the demand for the service.

Many of the charity’s clients are in financial difficulty because of job loss, pay cuts or illness, but the charity is expecting the numbers to rise in the tough economic climate.

The Centre for Economics and Business Research (CEBR) predicted yesterday that household disposable income would fall by 2pc this year, its lowest level since 1921 and the brutal recession of the post-World War One years.

With wages falling and living costs soaring, CEBR says the average household will have £910 less to spend this year than they did in 2009.

The gloomy prediction follows the broad sweep of tax hikes and benefit cuts introduced last week as part of the Government's attempt to bring the national deficit under control.

CAP’s chief executive Matt Barlow said: “Our experience shows that there will be huge amount of people in each of these areas who believe they are trapped by their debts. Creditors will be ringing all day, the letters will be piling up and their sleep, health and relationships will all be suffering.

“The fantastic news is that due to the commitment of their local church, we will be able to support each client by seeing them in their own home, contacting their creditors on their behalf, setting them a budget and staying with them until they are debt free.”