Britons face 'lifetime of debts'

Rob_K

From BBC news website:

http://news.bbc.co.uk/1/hi/business/5009510.stm

It could take 77 years on average for people asking Citizens Advice for help with debt to get back into the black, a report from the charity has said.

This is because most of those asking the charity for help with debt were on just half the national average income.

People were condemned to a "lifetime of poverty" burdened by debt, the charity said, with many unable to afford the fees payable for declaring bankruptcy.

On average, people seeking help from Citizens Advice were £13,153 in debt.

The charity said the number of people seeking counselling for credit card and loan debt had doubled in the past eight years.

Life overshadowed

The Citizens Advice report stated that many of its clients were stuck in a spiral of low incomes and very high debts.

"Low income, combined with badly informed and poorly understood financial decisions, are at the root of many of our clients' debt problems," David Harker, Citizens Advice chief executive said.

"The reality is that they are condemned to a lifetime of poverty overshadowed by an inescapable burden of unpayable debt," he added.

Mr Harker called on the government to introduce Debt Relief Orders (DROs).

DROs are designed for people on low incomes, who owe less than £15,000 but have very small assets.

DROs would work like bankruptcy, but be low-cost to initiate.

It would offer hope to people who were too poor to take advantage of other debt solutions, the charity said.

Rob_K

77 years???? _pale_

These people obviously don't know about MSE! :money:

Kevicho

The fact is that most of these people are in traps by the big companies so the government may face some opposition to that plan by the banks and credit companies (as they would be the ones losing out)

I myself am lucky that I found this site, have changed my spending ways and am working in most possible ways to make my money last longer, so i wont be a slave to the system for the rest of my life (i will be earning my money not giving it to the credit companies)

madman2000

77 years sounds an awful long time. I had £12Ks worth of debt 5 years ago and am now debt free. I was only on 12K a year but moved back in with my folks so as i could plough as much of my earnings in to relieving the debt and it worked.

For advice please check out https://www.mydebtadvice.co.uk, also worth checking with your local council who may run debt advice courses (as they do in plymouth). Also keep well involved with MSE as this place is a GREAT help !!!

take care all
J

lynzpower

Yes, wheres Martin, get him on telly saying those with a "lifetime of debt" have used the snowball calculator and certinaly dont have to wait that long!! :money:

Rob_K

Personally I think financial management should be taught at school- it's never going to help everyone, but over the long term I think it would have to have a positive impact on the country's debt.. But I suppose it's probably not in the government's interests to encourage cautious spending!

I mean they teach people about the dangers of drug addiction and unprotected sex.. why not debt?

Dora_the_Explorer_5

Rob_K wrote:

Personally I think financial management should be taught at school

It is, it's called maths - specifically adding up and subtracting.

jitsuguy

Hi all,

Just for your knowledge Rob K, but they have recently started a financial course at GCSE level. It is still in its infancy and only a few schools are running it at the moment. But hopefully it will spread over the next 5 years.

Jitsuguy

Rob_K

That sounds good Jitsuguy- hopefully it'll catch on!

Dora- I know what you mean, but I do think being financially savvy and learning to live within a budget is very different from being able to add and subtract. Obviosuly it's difficult to budget without those skills! But think it should be possible to teach kids the skills they need and really hammer home the message that being in heavy debt should not be seen as the 'norm' just because so many people are. Learning how to juggle numbers around doesn't teach anything about value.

Dora_the_Explorer_5

Rob, I partly agree with you - only experience teaches value, 'buy cheap, buy twice'. Living within a budget is all about adding up and taking away. Any attempt to help kids learn how to live within their means is to be lauded, but so far attempts at schoolkids sex and drug education have been pretty unsuccessful, so I'm not holding my breath on success on the financial front.

Broken_hearted

77 years to pay £13,153, is carp we live way under minimum wage and £18,000 is taking just over 3 years.