Scottish debt problems remain as the cost of living rises faster than salaries
September 9, 2013
Despite increased optimism surrounding an improving economy, many Scots are suffering in silence, continuing their struggle to make ends meet as the basic cost of living keeps on rising.
According to the recent report from the Joseph Rowntree Foundation (JRF), rising costs such as energy bills and childcare costs are accelerating at a rate which far outstrips the average income. Combined with widespread cuts such as benefit caps, many families are slipping further into poverty.
Donald Hirsch, who compiled this report, revealed his concerns about no longer linking benefits with inflation. He said: “This, combined with falling real wages, means that the next election is likely to be the first since 1931 when living standards are lower than at the last one.
“This year’s report demonstrates how the price of a basket of goods needed for an acceptable living standard has risen far faster than average inflation.
“This combined with low pay increases to create a widening gap between income and needs.”
In its report, JRF reported that the salaries required by a working couple with two children would need to be £19,400 each, followed by £25,600 for a lone parent, and £16,850 for a single person, in order to reach an adequate standard of living.
These figures have increased significantly in the past five years as a result of the economic downturn. The main burden for struggling families is the cost of childcare which has rocketed by 37%, twice as fast as inflation. Other costs which have increased over the same period include rent in social housing (26%), food costs (24%) and energy costs (39%).
The Government’s decision to increase personal tax allowance to £9,440 is one positive move from the changes introduced in April, however, further cuts to benefits have negated this benefit and essentials such as food and energy continue to rise.
A spokesperson for JRF, Katie Schmuecker, said: “Inflation has impacts for us all, but is mostly keenly felt by the poorest. Balancing weekly budgets has become an unenviable task for those who are worse off. Help for families in paying for essentials at more affordable prices can be just as important as improving household income – a precarious combination of rising costs and falling incomes leaves families in a risky position.”
If affording life’s essentials has forced you to turn to credit cards or loans and you need assistance in fixing your finances, why not call our experienced advisers at Scotland Debt Solutions today? Our knowledgeable and helpful advisers will be happy to discuss your individual needs and consider the most suitable debt solution to get your finances back on track for the future.
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