Squeezed Britain & The Cost of Living Crisis

[Legal Beagles]

Just under 18 months ago in a speech delivered at a Resolution Foundation event Gillian Guy, Chief Executive of Citizens Advice spoke about “squeezed Britain” and the major assumption behind then current policy thinking that you are OK if you are in work, earning and belonging. What was clear to us at Citizens Advice then, […]

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[PAWS]

Re: Squeezed Britain & The Cost of Living Crisis

Then nationally we were seeing some 2 million people a year,another 14 million online and a million on the telephone

My god! That’s seventeen million people who went to CAB. How many more are there?:jaw:

[Amethyst]

Re: Squeezed Britain & The Cost of Living Crisis

We have over 1.6 million individual visitors each year and we're one of the smaller consumer help sites.

[wales01man]

Re: Squeezed Britain & The Cost of Living Crisis

As things go in cycles we WILL have another Financial crisis when interest rates rise investment in jobs goes down High unemployment repossessions and the same as went before .
One guarantee the Rich get richer and the poor will get poorer

[Wombats]

Re: Squeezed Britain & The Cost of Living Crisis

The Institute of Fiscal Studies (IFS) did some calculations back in January which are typical statistics. The report, published by the BBC, states:

The analysis suggests that those near the top end of the scale, 10% from the very richest, have seen their incomes hit hardest, with a fall of 9% since the recession.


Meanwhile, those near the bottom, 10% from the very poorest, have seen their incomes drop by 2.4% over the same period.

This looks good on paper, and will no doubt be used in electioneering before too long.

However, the reality is 10% of someone earning say £2 million per year is £200000. 2.4% of £72 per week benefits leaves just £70.27 to live on.

The hit for the poorest is still much more significant than that for the richest. That £1.73 could buy so much for the person on benefits - a couple of main meals for example, maybe 10% or more of their electricity bill.

What looks good on paper means much more in context.

[PAWS]

Re: Squeezed Britain & The Cost of Living Crisis

Now I may have this all mixed up but this is a bit of a scary one.:confused2:
There are approximately 47 million people eligible to vote in the UK so it is natural to assume there are 47 million people eligible for credit. 17 million contacted the CAB and 1.6 registered on here. Now we cannot assume that all these people were looking for help with financial issues but looking at the posts on here and similar sites, debt seems to be the problem in the majority of cases.
Cab and LB are just 2 of the organisations offering help and as you pointed out LB is one of the smaller. (Small but perfectly formed!) Even allowing for the fact that some people may contact two or more of these sites/helplines etc. it is not too pessimistic to assume that as many as ⅓ of people eligible for credit are in financial difficulty.
That’s more than a little alarming. Now I am not 100% sure but is it only £1 a bank needs to have in its coffers to loan £12? That could be the US figure because I remember Lehman bros. were loaning $40 or somethinglike that for every buck they had and look what happened there! :boom:

On the up side anyone on here who is feeling any shame because they are in debt can rest assured that there are millions in the same boat (and we can’t all be stupid or reckless).
As for the Banks who tell us we are stupid and reckless well, they’re ******!

[FlamingParrot]

Re: Squeezed Britain & The Cost of Living Crisis

What you say above is called fractional reserve banking and it's the way all banks operate. They don't actually lend you any money as such, all they do is make an entry on a database. It's all zeros and ones, nothing solid. :mmph:

The bank$ are everything you say (*****) and more! :rant: :mad2:

[PAWS]

Re: Squeezed Britain & The Cost of Living Crisis

That is shocking. I might be very angry at many of the banking practices but they have to keep going. What I don’t quite understand however is if they only actually hold a fraction of the money they loan, what happens when they sell the debt for less than the hard cash available to back it up. (Does that make sense or am I having one of my ‘moments’):dizzy:
On the R3 personal debt snapshot Dec. 2013 it discovered 47%of British adults are worried about their debts and 44% of British adults say they struggle to payday. Now that the new pension rules have kicked in how long do you think it will be before people drain their pension pots just to keep the wolf (aka the DCA’s) from the door? :faint2:

[Kati]

Re: Squeezed Britain & The Cost of Living Crisis

It's not just the banks either :tinysmile_hmm_t2: when the DWP finally rolls out Universal Credit, claimants will be forced to wait a month (or more) before even getting any money!! All benefits payments will be paid in one go (including, in most cases, HB and CTB) to the claimant making THEM responsible for the payment getting to the correct people/department. Now, I'm not saying that this is a bad thing (being given the opportunity to budget yourself is not always a bad thing) BUT what about those that don't have the slightest idea of how to do this? How many cases of people getting a large amount of money in their accounts and going on a spending spree, forgetting that this money has to last them for a whole month (including rent etc...), and then losing their homes or having to do without food or electric until the next 'payday;' will we see then??

[PAWS]

Re: Squeezed Britain & The Cost of Living Crisis

DWP finally rolls out Universal Credit, claimants will be forced to wait a month (or more) before even getting any money

I did not know about that! It’s not just getting used to monthly budgeting. Many will fall into serious arrears or borrow to get through the first month. No point in having good budgeting skills when 0+0 = A BIG FAT 0.:noidea:
This reminds me of the SUN headline the day before the election in 1990:
Would the last person leaving Britain please turn off the light.:yield:

[Kati]

Re: Squeezed Britain & The Cost of Living Crisis

I did not know about that! It’s not just getting used to monthly budgeting. Many will fall into serious arrears or borrow to get through the first month. No point in having good budgeting skills when 0+0 = A BIG FAT 0.:noidea:
This reminds me of the SUN headline the day before the election in 1990:
Would the last person leaving Britain please turn off the light.:yield:

Exactly my point!! I've got the feeling that we are going to be seeing more and more people being threatened with eviction and/or bailiff action. More people being referred to CAB and Social Services and foodbanks. More people being 'forced' to go to payday loan companies etc... and being taken to court when they are unable to pay their debts

Makes me wish I could just pack my bags and emigrate!!

[PAWS]

Re: Squeezed Britain & The Cost of Living Crisis

I was already livid when I saw that report about the oldc ouple having to live rough after a cock up in payments caused them to be evicted and the number of people having to get food from food banks is disgusting and a national shame. As you say Kati, it is going to get worse and what really gets my goat is the Government has messed up their budget, the banks are stumbling from one crisis to the next and yet both pontificate at personal debtors to be more frugal!:yell:

[Kati]

Re: Squeezed Britain & The Cost of Living Crisis

How much more frugal can they expect people to be tho' ??

Can the single mum with no money to pay for her growing childrens clothes be expected to go without food herself to pay for these essentials??
Can the family struggling on a basic wage with not enough money for a car repair necessary to their continued employment be expected to go without gas and electric to afford it??
Does the elderly couple living in a 3bed rented house (having raised their family there over the years) face eviction due to the 'bedroom tax' and the council not having any smaller properties available??


How many people KNOW that banks cannot charge for unauthorised overdrafts or returned Direct Debits if the person is receiving benefits??

Personally, I find it scary that many low income families do not have the necessary skills to cook a decent meal from scratch. Just after moving in, we were directed to the nearest McDonalds and KFC places when we asked where the supermarket was . The whole town is full of takeaways and bookies and 'cash converter' places, and people are surprised that we can make a meal from fresh produce! Places like Perfect Homes and Brighthouse are the norm for many families on benefits now and no-one seems to bat an eyelid

Instead of penalising people who need their help and support, the Government, the banks, local councils etc... should be helping them.

[Wombats]

Re: Squeezed Britain & The Cost of Living Crisis

I agree with the above, BUT I have to begrudgingly say that I live in a beautiful area, but one of high deprivation. Many smoke and drink more than enough and find money to do so, then complain they can't afford electricity etc...

Please don't shoot the messenger here. I'm stating a fact about some people round where I live, though I know it's the stereotypical view of people on benefits and is far from the truth.

This morning I've been helping an illiterate person with his finances and completed a form to stop his Housing Benefit being paid straight to him, some councils make this process easy, ours does not! The idea of vulnerable people like him getting into debt is shocking. I agree that where people can handle their own finances they should be allowed to do so and be accountable for that choice. Equally, if people are asking for their HB to be paid to their landlord as they know they'll mess up, it should not be a bureaucratic nightmare to get this done.

[Kati]

Re: Squeezed Britain & The Cost of Living Crisis

I agree with the above, BUT I have to begrudgingly say that I live in a beautiful area, but one of high deprivation. Many smoke and drink more than enough and find money to do so, then complain they can't afford electricity etc...

Please don't shoot the messenger here. I'm stating a fact about some people round where I live, though I know it's the stereotypical view of people on benefits and is far from the truth.

This morning I've been helping an illiterate person with his finances and completed a form to stop his Housing Benefit being paid straight to him, some councils make this process easy, ours does not! The idea of vulnerable people like him getting into debt is shocking. I agree that where people can handle their own finances they should be allowed to do so and be accountable for that choice. Equally, if people are asking for their HB to be paid to their landlord as they know they'll mess up, it should not be a bureaucratic nightmare to get this done.

This is a great point. Too many people do not understand the wording on forms they are asked to fill in/complete - and too few people are willing to take the time to help them! I think it's GREAT that you were willing and able to help someone in the way you did, and wish more people would do the same

Sites like this and CAB can be a big aid when someone is looking for advice and hopefully many more people can be helped before they get too far into trouble they don't know where to turn!!