"The cost of living for those living on minimum household budgets is rising faster than inflation, the Joseph Rowntree Foundation has calculated.
It says that the costs for a single household on its low-income budget were up 5.3% this year, with rises of 5% for pensioners and couples with children.
The reason is that the poor spend more on fuel, food, and public transport, which have risen by 7% to 12%.
One in four households in the UK fall below Rowntree's minimun income levels.
The report warns that the benefits paid to working age people are well below minimum income standards.
But it says that pensioners who get the full amount of pensioner credit do receive enough to meet the minimum income standard.
The think tank had created the benchmark measure last year in order to determine the income people need "to reach a minimum socially acceptable standard of living" which includes "having what you need to in order to have the opportunities and choice necessary to participate in society"
I found this article quite shocking as there seems to be alot of people now facing having to live below the minimum standard of living. It seems like more people will be getting themselves into debt in an attempt to meet costs of everyday living.
[ view entry ] ( 3 views ) | permalink |
( 3 / 270 )The recession has hit many people very hard and now more then ever they are turning to credit cards to get themselves out of trouble. For this reason Ministers have decided to act as reported in the Guardian.
"Plans to protect consumers from being sucked into a spiral of debt by unscrupulous credit card companies will be announced by ministers this week.
A white paper, expected on Wednesday, will outline proposals to ban the sending of unsolicited credit card cheques, as well as measures to crack down on loan sharks.
Government insiders say the recession has placed people on low incomes at the mercy of unscrupulous lenders. Ministers will promise action to protect consumers from excessive interest rates as well as well as controls on methods used by credit card companies to lure people into debt. Because credit card cheques are charged as cash advances, a £500 cheque can cost an extra £150 in charges over a year"
This could be a really good way of protecting vulnerable people who are being targetted by these companies and finding themselves in debt. If you are struggling with debts now then why not have a look at the site for help and advice.
[ view entry ] ( 5 views ) | permalink |
( 3 / 287 )Many people who are in debt will have one, if not more, credit card which will often have a good chunk of their debt on it. Currently it is possible to apply and transfer your balance to another card and then receive 0% interest for a set period of time. However according to an article in the Guardian this could soon be a thing of the past for certain people. There is also information about remortgaging.
"Credit card customers who have had their applications for balance transfers turned down could find themselves paying almost £300 in interest over the next year as lenders become more fussy about who they accept as customers, it was claimed today.
A crackdown on borrowers with patchy credit histories and the withdrawal of many 0% interest deals mean the age of the rate tart could be nearing an end, according to research by price comparison website uSwitch.com.
A survey by the site found one in 10 consumers has had an application for a credit card turned down over the past year, and almost two-thirds of these were borrowers looking to transfer a balance to a new card.
With the average balance transfer worth £1,846, and the average interest rate on a credit card standing at 17.3% APR, anyone who had hoped to move to a 0% deal could instead end up paying £284 in interest over the next 12 months.
Figures from the card providers' trade body Apacs make the prospects for borrowers who want to switch look even bleaker – it said 40-50% of applications are being turned down, compared with around a third in 2005, although it is not clear how many of these are from consumers with existing balances.
Alongside a fall in acceptances, uSwitch said would-be rate tarts are also having to contend with a fall in the number of long-term balance transfer deals.
There are still 178 balance transfer cards on the market, compared with 204 this time last year, uSwitch said, but some of the longer deals have disappeared and lenders are increasingly offering borrowers just six months to pay of their debt before they start charging interest"
This could be bad new for those in debt as you could find yourself paying hundreds of pounds in interest which will only make your debts worse. The best thing that you can do is to start tackling your debts immediately instead of transferring them around. One way in which you could do this is by starting an IVA or by contacting us for further help and advice.
[ view entry ] ( 4 views ) | permalink |
( 3 / 280 )According to a recent article in the Guardian more and more Londoners are finding themselves in personal debt and at the mercy of debt collectors.
"Personal debt in London has become deeper, more widespread and complex since the recession, and creditors are more aggressive in recovering payment, debt advisers said today.
The average level of debt among Londoners seeking free face-to-face advice has increased by 16% since January 2007 to £18,131 a person, even though their average annual household income has remained the same at around £10,000.
But the economic downturn has made creditors less willing to negotiate, according to a report from Capitalise, a partnership of London debt advisers, which has found that between 2007 and 2008 repossessions of assets increased by 40%.
Graham Fisher, chief executive of Toynbee Hall, the charity leading the Capitalise partnership, said: "Our advisers report that creditors are reacting to the debt crisis by passing on more cases to debt collection agencies and resorting to court actions or bailiffs.
"We're calling for an integrated approach between local and central government and the voluntary sector in order to tackle the increase in personal debt caused by the recession, and more intervention where creditors are acting unreasonably.
"Employers also have an important role to play in preparing their workforce for potential redundancy and helping them to take preventative measures to stop them sliding into debt."
Helal Miah, a debt adviser for Toynbee Hall, said he had seen several examples of bailiffs employed by local councils using bullying tactics to extract money from vulnerable debtors"
There is often the misconception that those living in London must be wealthy but those in inner London actually have a much greater risk of financial exclusion and those living in outer London have considerably higher debts. If you are struggling with debts then you may like to consider an IVA which is a legal and government approved method of resolving debt that avoids the consequences of bankruptcy. If you owe over £15,000 to three or more creditors and can't afford to meet the repayments then you may be eligible for an IVA.
[ view entry ] ( 4 views ) | permalink |
( 3 / 298 )If you are currently in debt, you may find that the recession has an impact on how you can deal with this. An article in the Guardian shows that often now the grace period whilst a debt solution is put in place is being turned down by creditors.
"Our first job would normally be to contact her creditors to arrange for a grace period while we set up and test a realistic budget. Last year, nearly every creditor would give us four weeks to do this, while freezing interest and putting the account on hold. This would give clients a chance to discuss things with their family, test the new budget, and allow them time to break out of the cycle of stress and fear to get back in control of their lives. We'd need to confirm to the creditors that the person could live on the budget, and get all of their approvals before we set up a signed repayment plan. Seeing this evidence, creditors would often freeze future interest and accept the payments. It helped us keep more than 70% of clients up to date with their agreed repayments and back on the path to financial sustainability.
Now, with the recession, there's no grace period, no chance to freeze interest or put a hold on recovery actions while clients get back on their feet - not until the creditor has agreed a repayment plan. In G's case, this was six months, during which her debt continued to rise with interest charges while the debt collection agency ignored correspondence from us, and she started to receive up to eight harassing calls a day. It seems the agency has a telephone database programmed to ring each number up to eight times a day.
G also received letters stating that she was in danger of eviction - which was illegal - and there were visits to her neighbours, who were asked to pass on letters to her. Because she lied about being employed on some of her original credit applications, she can't file for bankruptcy. G has twice broken down in our offices, and last time told us that she could see only one way out of her situation. She's the third person to say this since April"
Unfortunately the article goes on to state that this is happening more frequently now we are in a rescession and the creditors are just not willing to comply. The best thing that you can do is to tackle your debts as soon as possible and not leave them to get to a point where it will impact on the rest of your life. For more help and advice have a look at the website and get immediate advice with our money saving tips.
[ view entry ] ( 4 views ) | permalink |
( 3 / 321 )
Archives
