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Don't let poor children pay the price of debt
A report released this week from Save the Children has revealed that 65% of families earning less than £30,000 will struggle to get by this winter. Of these families the majority expected to get into debt of around £500 to fund Christmas, and 19% said that it could take them more than a year to pay the money back.
Save the Children’s research also highlighted that 55% of families earning £12,000 or less a year will turn to high-interest lenders to get through the winter, and 60% of families intend to cut back on the heating or limit the amount they use it this winter.
The research, released as part of Save the Children's debt campaign, also highlights how people on low incomes often have to borrow to cover unexpected costs such as a broken washing machine, or essentials like heating or winter coats for their children. As with many low-income earners they often have fewer opportunities to access affordable credit, meaning that many have no choice but to take on high interest debt courtesy of catalogues, rent-to-own shops and doorstep lenders.
Here is a review of the other top money stories of the past week commencing 30 November 2009.
Tuesday 1st December
Consumers choosing to pay off their debts – New figures from the Bank of England have revealed that In October, the amount of money paid off on overdrafts and loans was £713m, the highest level since records began in 1993. Britons cut their credit card, loan and overdraft debts by £579 million in October. These figures have indicated that many are trying to improve their financial situation in the current climate, by using any extra income to pay down their debts. Separate figures from the Building Societies Association have shown that building societies have £930million less in savings accounts in October. Ultimately, a balance needs to be struck with people trying to reduce personal debt so that consumers and institutions can begin to adopt more stable financial habits.
Unemployed to get help setting up businesses – The government has announced its plans to help unemployed people start up their own businesses. The government plans to pay up to £800 tax-free and provide intensive support and advice on how to become self-employed as soon as people sign on to claim job seekers allowance. At present, people have to be out of work for six months before qualifying for a £50-a-week self-employment credit for 16 weeks. It is believed that more details of the new scheme will be given after the Pre-Budget Report is announced next week.
Save the Children’s research also highlighted that 55% of families earning £12,000 or less a year will turn to high-interest lenders to get through the winter, and 60% of families intend to cut back on the heating or limit the amount they use it this winter.
The research, released as part of Save the Children's debt campaign, also highlights how people on low incomes often have to borrow to cover unexpected costs such as a broken washing machine, or essentials like heating or winter coats for their children. As with many low-income earners they often have fewer opportunities to access affordable credit, meaning that many have no choice but to take on high interest debt courtesy of catalogues, rent-to-own shops and doorstep lenders.
Here is a review of the other top money stories of the past week commencing 30 November 2009.
Tuesday 1st December
Consumers choosing to pay off their debts – New figures from the Bank of England have revealed that In October, the amount of money paid off on overdrafts and loans was £713m, the highest level since records began in 1993. Britons cut their credit card, loan and overdraft debts by £579 million in October. These figures have indicated that many are trying to improve their financial situation in the current climate, by using any extra income to pay down their debts. Separate figures from the Building Societies Association have shown that building societies have £930million less in savings accounts in October. Ultimately, a balance needs to be struck with people trying to reduce personal debt so that consumers and institutions can begin to adopt more stable financial habits.
Unemployed to get help setting up businesses – The government has announced its plans to help unemployed people start up their own businesses. The government plans to pay up to £800 tax-free and provide intensive support and advice on how to become self-employed as soon as people sign on to claim job seekers allowance. At present, people have to be out of work for six months before qualifying for a £50-a-week self-employment credit for 16 weeks. It is believed that more details of the new scheme will be given after the Pre-Budget Report is announced next week.
House prices rise – The latest figures from the Nationwide Housing Price Index have shown that in November house prices rose by 0.5%. This marks the 7th consecutive month that Nationwide have recorded rising house prices. The average price of a house in the UK is now £162,764. There have also been reports from Moneyfacts that mortgage lending has relaxed slightly and mortgages are becoming slightly easier to obtain, as there has been an increase in the number of mortgages that require a deposit of 0-15%.
Thursday 3rd December
Poverty rises to the same level as a decade ago – Poverty in the UK is as widespread now as it was in 2000, with poverty, unemployment and home repossessions rising since 2004, according to a report released today by the New Policy Institute on behalf of the Joseph Rowntree Foundation. The report shows that 13.4m people now live in low-income households earning less than 60% of the national average - the same level as in 2000. The number of very poor households earning less than 40% of the average is 5.7m – the highest level in 25 years. The study also reveals that the number of people unemployed is at its highest since Tony Blair was first elected Prime Minister, with 16-24 year-olds most vulnerable to unemployment.
Poverty rises to the same level as a decade ago – Poverty in the UK is as widespread now as it was in 2000, with poverty, unemployment and home repossessions rising since 2004, according to a report released today by the New Policy Institute on behalf of the Joseph Rowntree Foundation. The report shows that 13.4m people now live in low-income households earning less than 60% of the national average - the same level as in 2000. The number of very poor households earning less than 40% of the average is 5.7m – the highest level in 25 years. The study also reveals that the number of people unemployed is at its highest since Tony Blair was first elected Prime Minister, with 16-24 year-olds most vulnerable to unemployment.
Friday 4th December
Student loan farce continues – As the first term of university comes to an end thousands of students are still waiting for loans and grants because of delays in the processing of their applications by the Student Loans Company (SLC). Figures from the SLC have shown that 35,000 applications still have to be processed. As students wait for their support to come through, some frustrated students have been forced to quit university as they have found going without their loan or grant just too hard. In light of many students falling into hardship, Credit Action recently published an article with some helpful advice for students awaiting loan payments. The article can be read by clicking here.
Student loan farce continues – As the first term of university comes to an end thousands of students are still waiting for loans and grants because of delays in the processing of their applications by the Student Loans Company (SLC). Figures from the SLC have shown that 35,000 applications still have to be processed. As students wait for their support to come through, some frustrated students have been forced to quit university as they have found going without their loan or grant just too hard. In light of many students falling into hardship, Credit Action recently published an article with some helpful advice for students awaiting loan payments. The article can be read by clicking here.
| Top Money Stories November 30th 2009 – December 4th 2009 |
