Not here to judge

Problem debt is costing the British economy ÂŁ8bn a year says a new report from the charity StepChange. The biggest costs are in job losses, housing problems, relationship break-ups and mental health problems that stem from mounting debt.

StepChange’s chief executive, Mike O’Connor, said problem debt was a, “brake on people’s capacity to work, or to return to work, a brake on aspiration and a brake on potential.”

The problems are all too familiar to Unite Community member Richard Vivian who has spent nearly 30 years as a welfare and money adviser. Problem debt, he says, is causing enormous stress in many communities with some people so desperate they are being driven to drink and drug abuse.

He says people should seek help immediately through local welfare advisors and not let the letters with the demands stack up.

“Almost everyone is in debt of some sort,” he says pointing to those with mortgages and bank loans. “Debt is endemic, our economic system is built on the back of debt and that creates problems.

“The problem can come from a crisis, such as losing a job that leaves you spending more money than you have coming in. £72.40 a week on Job Seekers’ Allowance (JSA) cannot pay for the costs of normal basic living.

“There can be JSA sanctions with money stopped for petty minor reasons. Applications for DWP benefits can take an age because they have faced staffing cuts, benefits can be stopped at short notice with the appeal process taking a long time.

“That’s when people resort to small, short-terms loans that you can’t get from a bank even if they had a bank account. The Wonga-style high interest loan that ends up mounting up.

“A lot of people see the doorstep lender, the loan shark, as the last resort. No one wants to admits they have used doorstep loan sharks but they do use them.

Still in debt from credit boom

 
“And there are still people in debt from the years of the credit boom, still paying the money back, still living with that debt.

“Welfare and money advisers do not judge, we do not lecture people. We do all we can to help people who can feel overwhelmed by their situation.

“The quicker you seek advice the quicker you will get help. A welfare adviser can help ease the pressure, we can negotiate with the gas electricity suppliers or about council tax arrears.

“We can help people get the welfare benefits they are entitled to. Just doing that can stop people falling into debt or help them out of it.

“Credit unions can also really help. If you join one you will get a bank account, that can help with direct debit payments and advice on how to manage your money.

“In a credit union you can save when you have money to spare and borrow if you need to when times get hard. They are a very real and good alternative for many people.

“Those who come into the Barnsley Advice Centre now have a multitude of problems. I used to take 40 minutes to resolve their issues, now it is more like two hours, and they have to come back.

“People may have issues which we don’t have the expertise to deal with ourselves. So we have a network of advice organisations – the Barnsley Advice Network – that we can refer people on to.

“Every area is different with different welfare advice organisations offering help such as the Citizens Advice Bureau. Walk in, pick up the phone, make contact but get help as soon as you can,” he added.

• For more on the Unite credit union service: finance without fear – call 0333 0110 450