Tagged: credit unions

Food poverty under spotlight in South Tyneside

Measures needed to tackle food poverty across Britain are being scrutinised in South Tyneside today.

Members of an all-party Parliamentary inquiry team, including South Shields MP Emma Lewell-Buck, visited the town’s Churches Together Key Project, at St Mary’s Centre, last summer as part of a fact-finding exercise.

The team also held a discussion session at St Jude’s Church Hall at Rekendyke, South Shields, and visited the New Hope Food Bank, in the town’s Robinson Street.

They heard poignant personal accounts from young borough people forced to rely on food banks to survive, and they were told that more than 1,680 people in South Tyneside had visited food banks in 2013.

Everything the team learned in the borough has helped inform the recommendations they made to the Government on the extent of hunger across the country and the actions needed to address it.

Today Mrs Lewell-Buck and the Rt Rev Mark Bryant, the Bishop of Jarrow, are among those meeting at South Shields Town Hall to discuss the findings of the hard-hitting report.

The report identifies a clear link between the use of food banks and tougher restrictions on access to benefits.

> Like it wasn’t always obvious ?

It insists that, contrary to Government claims, food banks have spread because of greater need.

Among a raft of recommendations, the report calls for bigger food banks to distribute more free food and advise people on how to claim benefits and make ends meet.

And it recommends a rise in the minimum wage and the provision of free school meals during school holidays for poorer children.

The report says:

“We do not believe food banks should take the place of statutory welfare provision in this country, but our evidence suggests there is a strong desire for longer-term interaction between food banks and vulnerable households, and an eagerness for these relationships to become embedded within local communities so they can help people overcome the deep-seated causes of hunger.”

Mrs Lewell-Buck said:

“We’ve had a great response to our report, and we’ve managed to get the Government to accept that some aspects of the benefits system aren’t working and are causing a lot of hardship.

“I think the Government’s priority needs to be dealing with low-paid and insecure work, as well as the harsh way benefit sanctions are being imposed.

> Yes, we all think so too. So are you actually going to do something about it ? Will your party, if they win the general election ?

“The group’s work doesn’t stop with the report, however. This is an ongoing mission to put an end to food poverty, and that is why I am holding today’s meeting to discuss the next steps for the group and for Shields.”

The Government is now considering the findings of the inquiry team.

A Government spokesman said:

“This report is a serious contribution to an important debate, with many good ideas, and recognising that the reasons behind demands for emergency food assistance are complex and frequently overlapping.

“As a country, we have enough food to go around, and we agree that it is wrong that anyone should go hungry at the same time as surplus food is going to waste.

“There is a moral argument, as well as a sustainability one, to ensure we make the best use of resources.”

SOME OF THE REPORT’S 77 RECOMMENDATIONS:

–  The Government should provide support for 12 pilot projects across the UK to draw together voluntary and public expertise to eliminate hunger.

– All supermarkets should follow the example of Tesco and add 30 per cent to any food given by its shoppers to food banks.

> Bought by shoppers in Tesco.  It might look a bit more magnaminous if they just gave something without those kind of strings ?

– Local authorities should work with food organisations to free up land for food production, retail and storage.

> But don’t we have all those things already ? Surely the problem facing people using foodbanks is that we have plenty of food, but not the money to buy it ?

– Credit unions accounts’ should be made eligible for receipt of Universal Credit to encourage use among low-income households.

– Local authorities should begin collecting information on whether landlords in receipt of housing benefit are providing basic cooking facilities for their tenants.

– The Government should reform the benefits system so it can deliver payments within five working days.

> I’m sure it could right now… if it wanted to.

– The Department of Work and Pensions ought to simplify access to hardship payments.

 > And it could do that right now too… if, of course, it wanted to…
Source –  Shields Gazette,  06 Feb 2015

£20,000 fighting fund to kick loan sharks out of Jarrow

A drive to keep people in Jarrow out of the hands of loan sharks and payday lenders has been launched – thanks to a £20,000 Lotto grant.

The cash will help raise awareness of the town’s existing advice drop-in centre at Jarrow’s Grange Road Baptist Church.

The church currently plays host to The Bridges – Your Community Bank, the trading name of South Tyneside Credit Union.

The grant, from Big Local, part of the Big Lottery Fund, will help increase sessions at the church and encourage better money management in central Jarrow.

The two-year programme will also help people looking to escape the cycle of sky-high interest rate loans.

One key element will be the creation of four savings clubs in schools, nurseries and children’s centres, to teach youngsters about saving.

Last year the bank issued 989 loans, payable back within a year, and typically for between £800 and £1,000, and totalling around £845,800, at interest rates from 5.1 per cent APR and 43.8 per cent – far lower than any payday lender.

But bosses believe the partnership has the potential to encourage many more people to approach them for safe, well-planned and responsible financial support, and for loans which reflects their ability to repay.

Janette Wynn, manager of Bridges – Your Community Bank, said:

“This partnership is an important development in helping people to get away from using either payday lenders, or doorstep lenders.

“It will raise awareness to residents that credit unions are another alternative source of borrowing instead of using payday loans and door step lenders.

“It will help adults by offering loans at far lower interest rates than they may otherwise pay, and it will also encourage them towards more responsible borrowing.”

Anne Corrigan, project co-ordinator for Big Local in Central Jarrow, added:

“This will help people to access affordable loans, reducing the numbers reliant on pay day loans and loan sharks and ultimately improving the economic stability of the community.”

Loans are typically used for home improvements, holidays, Christmas expenses, buying a car, and debt consolidation.

More information is available from Bridges – Your Community Bank on 0191 454 7677 or by emailing info@bridgesycb.org.uk, or from Anne Corrigan on 0191 428 1144 or by emailing anne.corrigan@groundwork.org,uk

Source –  Shields Gazette,  31 Oct 2014

Police chiefs blame welfare cuts for rise in shoplifting

Police chiefs have blamed savage welfare cuts for a sharp rise in shoplifting figures.

Ron Hogg, Police and Crime Commissioner (PCC) for Durham, claims people are “stealing to live” after a 35 per cent rise in his force area in shoplifting cases.

Despite not having direct evidence to back up his claim, Mr Hogg says people are turning to crime as they do not have enough money to feed themselves after the Government’s welfare reforms.

He said: “Shoplifting is up 35 per cent year on year and an awful lot of people are stealing to live.

“We predicted this would cause massive problems for some of the most vulnerable in our society.

“With more welfare reform yet to be implemented the situation will only get worse.”

Mr Hogg’s claims were echoed by Barry Coppinger, the PCC for Cleveland, after a 7.3 per cent hike in his force area.

He said: “Deep and relentless welfare reforms have a knock-on effect on other crimes, particularly shoplifting, as families turn to the black market to buy food and items they can’t afford.”

A Department for Work and Pensions spokesman said there was no evidence linking reforms to increased crime.

He said: “Ending the spare room subsidy was absolutely necessary in order to get the soaring housing benefit bill under control, returning fairness to the system and making better use of social housing stock.

“These rules already applied to the housing benefit claimants in the private sector – introduced by the previous Government.”

A recent DWP report found 522,905 households were affected by the so-called bedroom tax by last August and nearly a fifth of claimants had registered an interest in downsizing.

More than half of claimants had cut back on household essentials, a quarter had borrowed money and three per cent had taken pay day loans.

Mr Hogg and Mr Coppinger advised people who have found themselves struggling financially to use credit unions.

Source – Hartlepool Mail,  07 Aug 2014

Bedroom tax crime fears

Crime chiefs say the so-called bedroom tax is driving people to ruthless loansharks and committing crime.

Cleveland and Durham’s Police and Crime Commissioners expressed growing concerns over the financial pressures the benefit cut is having on households.

They say it is leading to a rise in crimes like shoplifting and people buying on the black market and worry the benefit cut will drive people to illegal and ruthless money lenders.

> And nobody ever speculated that this would be a likely consequence ? What will they do when they catch on to the effects of  benefit sanctions !

It is after a recent interim Government report on the spare room subsidy.

It revealed that 59 per cent of social housing tenants hit by the bedroom tax nationally have been unable to meet their basic housing costs.

Crime commissioner for Cleveland Barry Coppinger said: “Bedroom tax leaves many in severe hardship and I’m concerned that some families will turn to volatile loan sharks as a short-term solution.

“The pressure increases when they can’t pay what they owe the unlicensed moneylender, particularly if a threat of violence is looming over them.”

He added: “Deep and relentless welfare reforms have a knock-on effect on other crimes, particularly shoplifting, as families turn to the black-market to buy food and other items they can’t afford in the shops.

“I would reiterate the importance of seeking trusted financial advice, accessing credit unions and asking to be referred to a foodbank. Foodbank locations in Cleveland are on the information section of my website.”

And Durham’s Police and Crime Commissioner Ron Hogg said he feared the problem will get worse with further planned welfare reforms.

Mr Hogg said: “We predicted that this tax would cause massive problems for some of the most vulnerable in our society.

“With more welfare reform yet to be implemented the situation will only get worse.

“Many in our communities will struggle to put food on the table or pay their utility bills.

“As these financial pressures grow we would encourage the use of credit unions and urge those affected to seek trusted financial advice.”

The bedroom tax came into force on April 1 last year and affects social housing tenants in employment and those in receipt of housing benefits if they have any unoccupied rooms.

Households under occupancy have their benefits cut by around £13 each week for one bedroom or £22 for two bedrooms.

In Hartlepool, 1,581 households have been affected with the average weekly loss of housing benefit of £13.67 a week and the annual value of housing benefit reductions in Hartlepool is £1.123m.

Source – Hartlepool Mail,  31 July 2014

Rap song released in tribute to Archbishop of Canterbury’s payday loan stance

A Rap song has been released in tribute to the Archbishop of Canterbury‘s warnings about payday loans.

We Need A Union On The Streets, by music producer Charles Bailey and featuring the rapper Question Musiq, was inspired by the former Bishop of Durham, the Most Rev Justin Welby‘s efforts to expand Britain’s network of credit unions.

The song tells the story of young people who get into debt because of payday loans and features the words of personal finance guru Martin Lewis in which he warns that “payday loans gone wrong are a horrendous thing”.

The song has the chorus

What we need is a union, we need a union on the streets/Everybody hand in hand, people can’t you understand”

and the verse

“Yeah it’s unfair/But they don’t care/The rich get richer/While poor get less”.

The release comes after a national network aimed at offering an alternative to payday lenders was launched last month by Sir Hector Sants, who is heading a task group for the Archbishop on promoting credit unions.

The scheme is being piloted in the Southwark, Liverpool and London Church of England dioceses.

Mr Bailey, who has worked on social campaigns to combat gun violence and has also set the speeches of the late Tony Benn to music, said he had felt “moved” to help the task group.

When I listened to the Archbishop of Canterbury speaking out about pay day lenders I felt moved to do something to help his task group to reach to the urban youth who are often the victims and introduce them to a much safer and ethical way of borrowing through credit unions,” he said.

Mr Lewis said: “The payday loan industry is relatively new, and has used powerful marketing to build its business and groom young people to think it is normal.

 “It isn’t normal, it’s an extremely expensive way to borrow that most should avoid.”

Dr Elizabeth Henry, the Church of England’s adviser for minority ethnic Anglican concerns, said: “Efforts like this help the Church to extend its reach and engage with people on issues that affect their everyday lives.

“The song is appealing and I hope will get the message across to all communities that credit unions are a much safer way to borrow.”

The pay day lenders have argued that their loans are intended to be repaid over a short term and fill a gap left by the High Street banks. But Archbishop Welby has expressed concern that these loans are tempting people into a spiral of debt.

The Consumer Finance Association declined to comment on the recording.

Source –  Durham Times,  11 July 2014

Beware of the loan sharks

Payday loan sharks have trapped an increasing number of Brits into unmanageable debts and new research has revealed that this problem is increasingly getting worse.

In fact, a new report from the charity StepChange showed that the number of people seeking relief from payday lenders has shot up by 82 per cent.

Worryingly most of those vulnerable people seeking help had racked up thousands of pounds worth of debt after taking out more than one loan.

According to StepChange, people seeking advice in 2013 held an average of three payday loans, but at least 13,800 had five or more. The average debt was £1,647, significantly more than the average person’s monthly income of £1,381.

Many people make the mistake of taking out a payday loan believing that it is “easy money”.

However, payday loan companies are little more than legalised loan sharks that prey on vulnerable and low-income people and trap them into a cycle of debt that they cannot get rid of.

Many firms such as Wonga charge annual percentage rates (APR) of 4214%. To put it in layman’s terms and get an idea of just how quickly debt can balloon out of control, if you took out a loan of £3000 at 20 per cent APR (way below the average) and made the minimum repayment of two per cent or £5 per month, it would take you a whopping 90 years to pay it all back.

That is just at 20 per cent APR. Not at 4214% which was correct at the time this story went to print.

Now it is worth noting that the Financial Conduct Authority (FCA) assumes responsibility for the regulation of consumer credit in April.

Mike O’Connor, Chief Executive of StepChange Debt Charity, said that he hopes the FCA will address some of these issues.

He added: “The widespread harm and misery caused by payday loans continue unabated. The industry has failed to address the problems causing untold misery and damage to financially vulnerable consumers across the UK”.
“We hope the FCA’s proposals will address some of the areas of consumer detriment, but on issues such as affordability checking, rollover and repeat borrowing, there is an urgent need for even more radical reform”.

Unfortunately that seems unlikely, when you consider the corporate interests in maintaining high debt levels.

In fact, the StepChange charity highlighted the case of one man whose original £200 debt grew to £1,851 in just three months, thanks to inflated interest rates.

And this highlights an important problem. Most people simply do not realise just how rapidly their debts can run into the thousands before they take out a loan.

Fewer people realise that payday loan firms such as Wonga have previously advised the government on how to deal with consumer debt in the UK.

This essentially means that the government is working alongside those very companies who help to trap people into debt in the first place.

Further research conducted by YouGov for StepChange Debt Charity found that at least 26.3 million people had been offered high-interest credit such as payday loans via unsolicited marketing calls or texts.

These are often taken up by vulnerable, or desperate people who are uneducated about the high costs of loans.

And in most schools across the UK, financial management is not part of the curriculum.

Therefore, if you are struggling with money problems, avoid payday loan companies at all costs. It is better to speak to an independent charity or financial advisor who will offer help and advice for free and advise you on ways that you can make your budget go further.

> Or credit unions.

Source –  Akashic Times,  28 Feb 2014

http://akashictimes.co.uk/beware-of-the-loan-sharks-charity-highlights-predatory-behaviour-of-payday-lenders/

North Tyneside Crackdown On Payday Loan Companies

North Tyneside Council has agreed a motion to block payday loan companies websites from its computers –  PCs used by all council staff and those available to the public in libraries and Customer First centres – and to prevent such companies setting up business in council-owned commercial property.

The motion also called on the government to legislate and effectively regulate payday lenders (dont hold your breath on that one…).

Mayor Norma Redfearn said: “With the soaring costs of energy and food bills, cuts in benefits and a freeze on wages it’s not suprising  that more and more people feel they have no option but to take desperate measures to meet their bills.

“Our research shows that people are now borrowing on average around  326 pounds a month from these credit companies. The interest they charge is absolutely scandalous, so it’s no wonder that many people are caught in a spiral of debt and taking out more loans just to get by.

“This council is taking a significant first step by agreeing this motion, and I can guarantee there will be more action to come.”

No matter how bad things get, there will always be someone waiting to take advantage. It’s to be hoped that other councils might follow this example, as well as promoting Credit Unions as an alternative.