Charity: “£1,000 Would Save Half a Million from Debt Problems”
January 13, 2015
The debt charity StepChange has suggested that savings of even £1,000 per household would save more than half a million people in the UK from falling into problem debt.
The claim is based on research commissioned by the charity, which discovered that households with even modest amounts of money set aside can cope with debt-related financial pressures much more effectively than those without any savings at all.
StepChange now wants to see the UK government doing more to protect low income families and individuals around the country from finding themselves in serious debt trouble.
In fact, the charity has called on the next government, which will be formed no later than May 2015, to incorporate savings incentives for low income households into the framework for workplace savings and auto-enrolment pension laws.
“With personal debt showing worrying signs of growing and millions of people living on a financial knife edge and at risk of serious debt problems, we are calling on potential governments to make tackling personal debt a national priority,” said Mike O’Connor, chief executive of the StepChange debt charity.
“Encouraging more saving, especially by people on low incomes, is vital if they are to have a financial buffer to cope with financial shocks and avoid the slide into problem debt,” he said.
StepChange’s figures suggest that there are currently some 13 million people around the UK who would lack the means to keep up with their essential household bills for any longer than one month if their income dropped by a quarter.
The research recently commissioned by the charity also found that 42 per cent of people who earn less than £15,000 a year do not have savings worth the equivalent of a month’s salary. The same is also apparently true of 34 per cent of people who earn between £15,000 and £25,000 and 27 per cent of all households around the UK.
The result of this relative lack of savings, particularly among low earners, could be overcome if everyone were able to set aside £1,000 for “rainy day” scenarios, according the StepChange, which now wants to see government take the lead in encouraging better financial management and saving.
“Governments have started to address the retirement savings crisis by making saving easy, automatic and appealing. Now that system is established the next government should deal with the rainy day savings crisis in the same way,” said O’Connor in a statement.
“We are also asking potential governments to provide more support for people who want to tackle their debt problems, protect children and families from aggressive debt collection practices and ensure that people are helped to get back on their feet quickly following a financial crisis,” he added.
Whatever the situation, anyone facing up to financial difficulties and serious debt problems should look to get help and expert support as early on as possible to avoid bad circumstances becoming disastrous.
When taking out a joint loan, there are many things you need to consider. Signing up to a joint credit agreement is a huge commitment and it’s important to ensure you have all the facts before signing on the dotted line. While no one wants to think about a relationship breaking down, the truth is […]
If you’re looking to save some money it’s a good idea to make a detailed budget that lets you see where your cash is currently being spent, and offers an overall view of your finances. You’ll need to collect together your income and expenditure details, including annual costs such as insurance, car expenses, birthdays and […]
A trust deed is a common debt repayment programme based around a voluntary arrangement made between you, your creditors and a qualified independent trustee who takes control of your debt repayments for a typical period of four years. If you’re having difficulty paying your debts and have assets or a regular income, you may qualify […]
If you have built up debt from gambling, you may be able to write off part or all of the debt via a formal Scottish insolvency route. Not all insolvency solutions allow debts to be written off, but you may be eligible for a trust deed if you meet certain criteria, with sequestration also being a possibility […]
Her Majesty’s Revenues and Customs (HMRC) is one of the biggest creditors in Scotland, and indeed across the rest of the UK. Millions of people make payments to the government through HMRC in the form of income taxes, National Insurance and VAT every year. For the majority of people in employment, this is done automatically […]
Council tax is a charge levied on residential property and payable to the local council. While some properties are exempt from paying council tax, most households must factor this bill into their monthly budget. Households will be given a yearly charge which can then be broken down into a series of monthly instalments throughout the […]