Eighty per cent of the adult population in the UK struggle to talk about money. This afternoon, procrastinating while I try to write this piece, I opened an envelope that had been on my desk for over a week. I knew it was a bill and I had been putting off opening it. Despite my anxiety about seeing the amount of the bill, I knew that I was in a position to pay it straight away. But millions of us aren’t. Research by the Money and Pensions Service in 2022 discovered that 9 million people across the UK have no savings and another 5 million have less than £100 in savings.
The lack of savings means that when people suffer income shocks, they aren’t able to cope and this can quickly lead to debt. Income shocks could include relationship breakdown (such as separation), family changes (such as having a baby), being the victim of a scam, or an unexpected cost (such as an MOT bill, breakdown of a washing machine or fridge or funeral costs after a bereavement). This year, Citizens Advice has estimated that 5 million people ,including 1.5 million children, are in households trapped in negative budgets – income is less than essential expenditure. Citizens Advice say that they are seeing growing levels of debt among the people they help with debt advice.
People often get debt help as a last resort but it doesn’t have to be that way. The sooner people get help, the easier it may be to find workable solutions. Warning signs that someone is experiencing debt could include: cutting spending, ignoring letters and calls, borrowing from friends and family, missed payments, being declined credit or incurring late fees, using loans to pay off or consolidate other debts and priority arrears (such as missed utility or mortgage payments).
18-24 March is Debt Awareness Week. StepChange, who initiated the week, have over 30 years of experience helping people with debt. Staff from their organisation regularly share their expertise with Money Guiders England Network, a Quaker Social Action project delivered in partnership with the Money and Pensions Service. They remind us that getting debt advice involves having an impartial, expert look at your finances including budgeting, learning about which debts to pay first and possible long-term solutions.
The MoneyHelper resource provides lots of information and guides about debt, including a debt advice locator, and can be accessed by clicking on this link (external link).
Sources:
https://maps.org.uk/en/media-centre/press-releases/2022/one-in-six-uk-adults-have-no-savings
https://www.stepchange.org/how-we-help/overcome-barriers.aspx
https://www.moneyhelper.org.uk/en/money-troubles/dealing-with-debt