Get on track for 2015
November saw the highest level of new debt since 2007 with consumers borrowing on credit cards, loans and overdrafts hitting more than £1.25bn.
National Debtline and StepChange said the figures showed a worrying rise in consumers’ reliance on credit, and warned they expected a rush of people seeking help when the first credit card bills of the year started to arrive.
Figures* published by the Scottish Government show number of people living in poverty in Scotland increased to 820,000 in 2013, this was 110,000 more than in the previous year.
Struggling with your finances? You are not alone:
- With recent researchÑrevealing that half of Scots who are worried about debt and have found that this anxiety impacts on their ability to sleep at night it’s important that you get your finances in order now rather than delaying the inevitable.
- From January to June 2014 StepChange gave advice to 4,369 Scottish residents who were worried about their financial situation.
- The charity also revealed that 39 per cent of Scottish residents asking for financial support in this period were in debt because of council tax bills.
- Energy bills have been another problematic area for Scottish residents, who had the largest average electricity arrears (£616) of any British country. People who sought help in Scotland also had an average debt of £665 in rent alone.
Why not take the Money Advice Service DEBT TEST to find out how you can be helped with your finances.
Beware of PayDay traps!
Scotland has the highest payday loan debts throughout the UK. According to the charity StepChange, the average Scottish debt as a result of using payday lenders was £129 - £1,438 more than the rest of Britain.
Scots who want to take out a payday loan are being ripped off by online ‘credit brokers’ before they even get to apply for the loan - according to a report published by Citizens Advice Scotland.ÿ
Credit brokers are the ‘middle men,’ whose role is to put consumers in touch with payday lenders. Over the last year the Citizens Advice Bureau have seen growing evidence of:
- Hidden Fees: Most of the brokers had charged a fee for their service, without making this clear. The average fee is around£70, with many customers only finding out when they checked their bank balance later.
- Passing on personal details: the broker passed the customer’s personal details on to other brokers. In these cases, on average, more than four different brokers took fees costing the consumer an average of £264 with no guarantee of a loan.
- Refusal to provide refunds: consumers have been denied a refund despite asking for one within the 14 days allowed under law.
- Misleading advertising: A review of the main credit broker websites by CAS found that 4 out of 10 did not make it sufficiently clear to consumers that they were a broker service who did not offer direct loans.
- Links to Payday Lenders: The whole point of credit brokers is they are supposed to be impartial, and to refer you to a lender who suits your circumstances. But in many of the cases we see the broker have links to certain lenders and simply refer clients to these lenders, regardless of whether it suits the customer or not.
If you feel any of the above relates to you talk to one of our Money Advisors for free confidential advice on how to make your finances work for you in 2015 contact us to make an appointment.
Alternatively you can contact any of the below charities who will also provide free confidential advice:
- StepChange - 0800 138 1111
- Citizens Advice Consumer Helpline - 03454 040506
* - http://www.scotland.gov.uk/Topics/Statistics/Browse/Social-Welfare/IncomePoverty
Ñ - http://www.stepchange.org/Mediacentre/Pressreleases
ÿ - http://www.cas.org.uk/publications/real-deal-no-credit-and-broke