Tagged: pay-day loans

£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

300,000 Unemployed People Each Month Face ‘Five Week Wait’ For Benefits, New Research Shows

New research published  by the TUC reveals the future impact of a controversial new welfare reform – the five-week wait – on workers in North West England, with 39,000 newly unemployed people set to be hit each month.

Currently most workers who lose their job have to wait two weeks before they get their first benefit payment. But under new Universal Credit rules for assessing unemployment claims, most people will face a wait of more than five weeks before they get any money. This could mean going two months into rent arrears before any cash support arrives.

Across the UK, almost 300,000 people will be hit each month by the five-week wait. Despite this, recent polling by YouGov for the TUC has revealed that fewer than one in seven people (13 per cent) say they have heard of the plans. Seven out of ten people (70 per cent) say that they would be worried when asked to imagine losing their job and not being entitled to receive any benefit payments for five weeks. More than half (52 per cent) say it makes them think less favourably of the government’s welfare reforms.

The TUC’s new research reveals the monthly average number of newly unemployed people broken down by region, local authority (county and unitary) and constituency. This indicates how many people can be expected to be hit by the five-week wait when Universal Credit replaces workers’ current safety net benefits.

Across the region, Lancashire is the most affected local authority where over 5,000 people each month are expected to be hit by the five-week wait, in Manchester more than 3,600 people will be affected whilst in Liverpool just under 3,500 people will be affected.

These local authorities are amongst the biggest affected in the UK, ranked 4th, 9th and 11th respectively. The DWP’s own analysis suggests that the measure may increase claimants’ reliance on short-term loans.

The TUC has launched a new campaign, Saving Our Safety Net, to highlight the five-week wait and other welfare reforms that cut safety net protection for working people.

North West TUC Regional Secretary Lynn Collins said:

We know workers in the North West have suffered cuts in real earnings over the last 5 years, and will have relied on savings to get by, which means that many workers have no financial buffer if they lose their job. Help should be there when it is needed, but instead people will be left to rely on food banks and pay day loans to see them through the wait.

“Welfare reform is one thing but the five week wait is a collective punishment for anyone who loses their job. People need to focus on finding new work, instead of being stressed-out about how they will pay the rent, feed the kids and keep the heating on.

“Job security has got worse since the recession. Government ministers are out of touch and fail to understand the anxiety many people feel not knowing if they’ll still have work next month. If your job goes, the five-week wait puts you at greater risk of a downward spiral where you’re trapped in debt, lose your home, become ill from the stress and fall too far to climb back again.

“With these escalating bills, worsening job security and only a limited recovery in the jobs market, a 5 week wait could easily push many more families into poverty through no fault of their own. These people have paid for, and deserve, a safety net.

“We are launching the Saving Our Safety Net campaign to expose government welfare plans for what they are – cuts to the National Insurance safety net we’ve all paid into on the understanding that it will be there when we need it.”

Source – Welfare News Service 07 Aug 2014

http://welfarenewsservice.com/unemployed-people-each-month-face-five-week-wait-for-benefits/

Hartlepool residents rack up £7.5m debt mountain

Hundreds of people in Hartlepool have been forced to plead for help after racking up personal debts worth £7.5m in just a year.

 Shocking new figures reveal Hartlepool Citizens’ Advice Bureau supported 1,500 people with debt and money advice over a 12-month period – with the average debt a staggering £16,000.

Worried officials at the Park Road-based CAB say they are very concerned with the high level of personal debt their clients have, some of which is more than £100,000.

Not everyone in money trouble seeks help or advice from the CAB either so the £7.5m figure – which is similar to previous years – is likely to be even higher.

Personal debt includes everything from credit cards, personal loans, pay-day loans, mortgage and rent arrears, council tax arrears, catalogue debts and bank overdrafts.

The figures relate to the period between April 1, 2013 and March 31, 2014. In 2012, the figure was around £8m and worried officials say there has been no “let-up”.

Joe Michna, CAB manager, said: “There has been no let up or reduction in the number of people contacting us with debt related problems.

“The debt levels, given that they are average figures, are concerning.

“While the average debt may be £16,000 excluding mortgages, some clients have debts of well over £50,000 when they contact us.

“We deal with clients who have personal debts of everything from a few thousand through to £100,000.”

Officials say the golden rule for those experiencing money trouble is to seek help or advice early.

The CAB offers two services, a Debt Advice Service and a Money Advice Service, which offers help and support from everything from financial planning to budgeting.

CAB staff aim to re-arrange and improve debt-ridden clients’ financial affairs by gathering information on a client’s indebtedness, confirming household income, alerting clients to other potential sources of income, and identifying priority debts.

Once a full and complete picture of a client’s financial situation has been established, the CAB team can help to identify the most appropriate option for dealing with the particular client circumstances which include self-help support packages, negotiations with client creditors and bankruptcy applications.

The debt and money advice services gave advice and assistance to a combined 1,500 clients.

Mr Michna added: “The golden rule for people who have gotten themselves into debt is to seek advice early.

“We are fortunate in that we can offer two services to local people – a full debt advice service and also a money advice service.

“The money advice service can offer advice on budgeting, financial planning and income maximisation.

“We then have our full debt advice service which offers advice and assistance with debt relief orders, bankruptcy and individual voluntary arrangements as well arranging repayment plans with creditors.”

 

Source –  Hartlepool Mail,  16 July 2014