Millions trapped on a treadmill of debt
Millions of cash strapped Brits have this year taken out loans just to put food on the table and cover energy bills. And despite the economy showing positive signs of recovery, they are not optimistic about their situation improving any time soon.
New research by Circle Housing Group, one of the UK’s largest providers of affordable housing, found that around 10 million adults – or one in five (21%) – took out a loan in the past 12 months. More than half (56%) of these borrowers expect to do the same in the next year, this compares to only 8% who have not taken out a loan this year.
The study found that a third of borrowers used loans to pay for food and basic living essentials (28%), while around one in five needed help to cover mortgage and credit payments (21%) or energy bills (17%).
Circle commissioned ComRes to carry out the survey of more than 2,000 GB adults, as part of its work to understand the issues facing its residents in the current climate of austerity and changes to the welfare state. In the past year alone, Circle has provided financial advice to around 10,000 residents.
Matt Earnshaw, Group Financial Inclusion Manager, at Circle, said: “These figures are very concerning and demonstrate the difficulties that many people are currently facing when it comes to managing their day to day finances.
“In the social housing sector we know many are struggling to deal with rising food bills and spiralling energy costs and are being caught out by emergencies and life changing events, such as ill health, which can make debt become unmanageable.
“Our general advice to anyone in this position is to get help right away and deal with the debt quickly."
One in five of borrowers took out a loan in the past 12 months to cover one-off payments, such as replacing essential white goods (20%) or paying for Christmas (19%). While over a third (34%) of people with loans needed to pay for multiple goods or services, indicating that Brits have several everyday needs that they cannot afford.
Circle Housing Group also announced today that it has teamed up with Money Advice Service to provide a range of online tools to help consumers manage their money more effectively.
Matt Earnshaw has provided some simple tips to people who are struggling with debt problems:
- Budget correctly: Write down all your family’s finances – it can really help to focus the mind. Create a very simple list of your income (e.g. wages, benefits, child support) and expenditure (e.g. food, fuel, travel) – this will enable you to identify what areas of spending you might be able to trim. Don’t fool yourself about how much you spend on things. The key is being totally honest with yourself to make it a valuable exercise. What can you cut down on or cut out altogether?
- Get free advice from experts: If you feel your debts are unmanageable and they seem to be spiraling out of control, speak with experts, who can guide and support you. Identifying and negotiating payment plans is something that organisations like the Citizen’s Advice Bureau, Step Change Debt Charity (0800 138 1111) and the National Debtline (0808 808 4000) can help with.
- Be realistic: Set yourself a realistic time-frame to get out of debt. Don’t get frustrated that it will probably take more than a few weeks. If you’re serious about addressing your debt problems, you need to take a long-term view.
ComRes interviewed 2,020 GB adults online between 30th August and 21st September 2013. Data were weighted to be demographically representative of all British adults aged 18+. ComRes is a member of the British Polling Council and abides by its rules. Full data tables are available on the ComRes website, www.comres.co.uk.
Notes to editors:
For further information please contact Simon at the Circle press office on 0207 447 3148 or email firstname.lastname@example.org.
Circle is one of the UK’s largest providers of affordable housing, with 12 partners and 65,000 homes. With a dedicated team of more than 2,200 staff, we provide homes and services to around 300,000 people across the UK.
We have one shared mission at our core; to enhance life chances. Together with our partners we deliver great homes to live in and first rate services for our customers, as well as providing vital care, support and telecare services to help people live independently for longer.
Our partners are: Nine registered providers (RPs): South Anglia Housing, Wherry Housing Association, Old Ford Housing Association, Circle 33 Housing Trust, Merton Priory Homes, Mole Valley Housing Association, Mercian Housing Association, Roddons Housing Association and Russet Homes; two support & care partners: Circle Support and Invicta Telecare, the UK’s largest independent provider of telecare services, as well as Circle Living for sales, marketing and management of affordable and private rental homes.