Tagged: personal debt

South Tyneside’s ‘staggering’ debt figures – and for some the only way out is suicide

Cash-strapped South Tyneside has the second-highest level of personal debt in England, a shock new report reveals.

Statistics show that 607 clients visited the borough’s Citizens Advice Bureau (CAB) between July and September last year, with debt-related concerns.

Concern over debt now accounts for a staggering 42 per cent of that bureau’s workload.

A new national CAB report also reveals that South Tyneside has the fourth-highest level of personal debt in England and Wales.

However, when two Welsh authorities are taken out of the equation, it emerges as the second worst debt-hit area in England – just behind Stoke-on-Trent.

 Ian Thompson, chief executive of South Tyneside CAB, based at the Edinburgh Buildings in South Shields, revealed that priority debt, such as rent and Council Tax, had spiralled in recent years.

Meanwhile, advice workers are expecting a further surge in demand for the service this month as borough residents begin to count the cost of Christmas spending.

Mr Thompson revealed that debt-related problems are so great that some clients in the past have committed suicide as an escape from them.

The seriousness of the situation has led him to write a letter to every elected member on South Tyneside Council, outlining the situation and his concerns.

Mr Thompson said:

“We know there is an awful lot of debt in the borough.

“Forty two per cent of our work is working with clients with debt problems.

“That’s a staggering figure when you consider that we deal with a whole range of issues, ranging from employment to housing and much more besides.

“The sort of debt we are encountering has changed during my time with the bureau, from credit card debt and to priority debts, such as Council Tax arrears and rent arrears.

“These are life-changing, priority debts which can lead to people losing the roof over their heads.

“Unmanageable debt causes untold misery and can require the intervention of GPs for the treatment of depression.

“We have also had, as an extreme example, clients committing suicide because of the pressures they are under.

“From mid-January we are expecting a surge in the need for debt-related advice. Prior to Christmas, people tend not to think too much about debt – then the bills and credit card demands start to arrive.”

Top of CAB’s personal debt chart for England and Wales are two Welsh authorities – Denbighshire and Merthyr Tydfil.

In the North East the other worst-hit authorities are Darlington (5th), North Tyneside (8th), Gateshead (12th) and Middlesbrough (13th).

Source – Shields Gazette,  15 Jan 2015

 

Poor Families Hit By Welfare Reforms ‘Running Up £52 Of Debt Every Week

This article  was written by Patrick Butler, social policy editor, for theguardian.com on Wednesday 26th March 2014

Low income families hit by welfare reforms are running up personal debt at the rate of £52 a week to cope with the rising cost of living, with many saying they have no idea if they will be able to pay it back, according to the latest instalment of a poverty research project.

The project found that the average household debt stood at just under £3,000, up by 29% since October, equivalent to £670. Families were typically spending £34 a week repaying debts, from an average income among those surveyed of £176 a week.

 The poorest families are also spending nearly four times the national average on heating and fuel – equivalent to a fifth of their income – while nearly a third of households spend less than £40 a week on food.

Almost half of the participants in the survey, all of whom have been affected by welfare reforms such as the bedroom tax, report that they have no money left to live on each week once rent, food and bills are paid for.

The findings emerged in the third of six planned reports by a group of housing associations, which are tracking how families living in social housing in the north-west of England are coping with cuts to their income as a result of welfare changes and recession. The Real Life Reform project examines in detail the finances, views and behaviours of a group of up to 100 households.

Andy Williams, director of neighbourhood services at Liverpool Housing Trust and chair of the Real Life Reform steering group, said: “Householders are falling into more debt, including some taking money from loan sharks, and it’s a real concern that people are having to borrow to cope with the cost of everyday living.

“In our first report in September, people said they’d resist falling further into debt, yet just six months later this picture has emerged.

“Nearly eight out of 10 people in the study owe money. With an underlying average debt of £2,943, some may never pay this off given that they have, on average, as little as £3 left at the end of each day for food.”

The survey found that the number of households in debt was up four percentage points since the autumn. Over half of families said they did not know how long it would take them to repay the debt or that they would never be able to repay it. Nearly one in seven households had debts that would take more than four years to pay back.

One participant told the project: “I have just taken out a new loan from a loan shark for Christmas. It will never go down but it just about keeps my head above water.”

The report said that poorer families were increasingly reliant on debt to make ends meet. “The consequences of weekly repayments, which have more than doubled since the start of this study, alongside increasing costs in all areas, is really placing financial strain and hardship on our households.”

Household food spending by Real Life Reform participants, which had dipped to an average £2.10 a day in October rose to £3.08 in January, an increase attributed to bigger-than-usual grocery shopping bills over the Christmas holidays.

Fuel spending had gone up by 8% since the last survey was carried out in October while household fuel bills had risen by an additional £7 a week since the summer. Participants were spending an average of £141 a month on energy, compared with the UK average of £106, in part because many were on expensive payments meters charging 27p per kilowatt hour compared to 17p for those not on meters.

Source – Welfare News Service, 26 March 2014

http://welfarenewsservice.com/poor-families-hit-by-welfare-reforms-running-up-52-of-debt-every-week/