Expertsgiveadvicetohelpfamilies tackletheirmoneyproblems

Many families are bearing the burden of problem debt as households see their outgoings surpass their income for the first time in nearly 30 years.

The average person has outgoings of £26,800 a year but only has a disposable income of £20,200, says the Office for National Statistics (ONS). This means they need £6600 a year more than they take home after tax.

Debt has been ballooning since 2013, and unsecured borrowing has now hit an alltime high.

Glenn Everett from the ONS said people were more gloomy about their well-being.

He said “This may be due to worries about rising debt repayments, which could be driving concerns about their future financial situation.”

Benefit changes with rising living costs have hit many people with more than one in five children in Scotland living in poverty after their family’s housing costs have been accounted for.

The Trussell Trust, a charity that co-ordinates the only national network of food banks has reported foodbank usage has risen by 15 per cent in Scotland and families with children make up more than half of foodbank users.

The charity provided 87,981 emergency supplies to people in crisis between April and September 2018

Single parent households are the most likely to report that they are not managing well financially, 21 per cent above the Scotland average of nine per cent.

Steve Doherty, a senior money adviser at Inverclyde council, said: “One of the main problems families are facing, in our experience as an advice service, is people are struggling with stagnating incomes and rising living costs and as the gap between both is widening, people are filling that gap with borrowings.

“Their savings are already gone and people are now borrowing to get by.

“Many families are also stuck in the two-income trap, where they just cannot survive without both parents being out at work.

“Today this is normal but 40 years ago, it wasn’t. Families could survive on one income if they wanted but these days both parents need to be out working and they are still struggling to get by.”

But Steve says it is possible to be debt free.

He said: “Usually, the biggest obstacle for people is they don’t believe they can become debt free. People who struggle with debt often have been struggling for years and may even have witnessed their parents struggling with it, so it is ‘normal’. They don’t believe another life is possible. They may not even realise it but they might even be teaching their children that debt is normal.

“We have had cases in Inverclyde, where parents have taught their children not to open the door to anyone, in case it is a debt collector.

“Their home becomes a prison, where every knock at the door is accompanied with fear and their children are conscious of this. It is their normality.

There are many solutions to tackle debt and seeking help from a professional may mean they can freeze interest and work out a reasonable payment plan that they can afford.

In 2017-18, for example, nearly 1700 people in Scotland became debt free through the Debt Arrangement Scheme.

Steve added: “Once people have contacted our advisers, we usually sort things out quite quickly, in a sense opening the door, for the whole family, to another type of life. A debt free one that doesn’t involve fear.” Mum-of-two Sandra was distressed when she dropped in to the foodbank at the Edinburgh Food Project.

She had been experiencing problems with her housing benefit after her mother came to live with her temporarily because of illness. But this led to her housing benefit being cancelled and Sandra was facing eviction from the home where she lived with her two sons.

She had been using credit cards and pay day loans to survive but she could no longer rely on this option as she had reached the maximum credit limit.

Unable to afford to buy food, she turned to the foodbank for support. The following work was carried out on Sandra’s behalf: • They contacted housing benefit and arranged an appointment to meet with an advisor to look at the information required to get the benefit in place. • All information was submitted and a supporting statement was sent. • They contacted a Debt Advisor, Advice Shop and arranged an appointment. • Discretionary Housing Payment was applied for. Thanks to the support and efforts of the foodbank, Sandra now has housing benefit and discretionary housing benefit in place.

Her rent arrears have been reduced by 82 per cent and she has a payment plan in place. Her debt is being dealt with through the Advice Shop and she is currently managing her finances and no longer requires the support of the foodbank.

Low income and problems with benefits, homelessness, unemployment, and debt are the most likely triggers of clients’immediate food crises. The Edinburgh Food Project is part of the Trussell Trust network of foodbanks, providing emergency food parcels to people living in food poverty. mum Sandra