Great 'what do you pay more for if you're poor?' Hunt

Former_MSE_Penelope Posts: 536 Forumite
edited 9 November 2010 at 4:35PM in Budgeting & bank accounts
Great 'what do you pay more for if you're poor?' Hunt

We're doing some work with Save the Children, and one issue's the 'poverty premium', where being cash-strapped means things cost more. Examples include higher bills on gas and electricity meters, no web access so things are pricier and more expensive borrowing, eg, doorstep credit. We'd like MoneySavers' experiences on what's costlier when you're poor.

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  • elbeie
    elbeie Posts: 3 Newbie
    edited 12 November 2010 at 4:15PM
    Anything from the supermarket. There is no way that you can afford to bulk buy and take advantage of big-buy-bargains. You end up paying for 3 small packets of food / washing powder (everything really!) rather than one big one which is a smaller cost. You can't take large 'bulk' amounts on the bus.
    You are unlikely to be able to afford insurance and so pay more than insurance premium and excess for home break-ins, pets being unwell etc.
    You pay more for insurance if you live in a poor post-code.
  • Credit is the big one.

    If you have a low income or are in some debt, it seems you get penalised when trying to borrow, with much higher interest rates. Substantial differences in interest rates mean the poor keep getting poorer, and the rich, richer.
  • Car tax! It seems a disproportional difference between a 6 & 12 month payment. Especially now that if you buy on line there is no commision taken by the post office. Just HMG bleeding you again.
  • jamsandwhich
    jamsandwhich Posts: 659 Forumite
    edited 12 November 2010 at 4:16PM
    Car and House insurance - as far as my experience is aware these are the only organisations who penalise you and add a charge for paying monthly.

    I find it easier to budget monthly as it can be difficult to put aside money over twelve months for when insurance is due yet any company I have dealt wiht has imposed a credit charge for monthly premiums when everyone else (telephone, gas, electric etc) encourages by giving a discount?

    This practice has in the past led me to overdraw for a couple of months as it is a lot cheaper to pay a minor interest charge and pay insurance in full.

    I also feel that this is a practice which should stop because I think it encourages people to go without insurance if they do not have the lump sum to pay for it.
  • corbyboy
    corbyboy Posts: 1,169
    First Anniversary
    I also feel that this is a practice which should stop because I think it encourages people to go without insurance if they do not have the lump sum to pay for it.

    While I would agree that I hate being charged extra just for paying monthly, adding a few pounds on each month isn't going to make the difference between being able to afford insurance and not being able to afford it.
  • tomitma
    tomitma Posts: 390 Forumite
    Electricity and Gas, many of the unemployed opt for the meter payments, as they have already gotten debt with these companies, They
    pay a higher rate for the gas and electricity supplied.
  • Fen1
    Fen1 Posts: 1,575
    Combo Breaker First Post First Anniversary
    edited 12 November 2010 at 4:19PM
    Clothing, especially items like shoes.

    You can buy cheap clothes, but they don't last and quickly look shabby. There can be a huge difference between a cheap pair of shoes and a quality pair and the length of time they last. You can end up paying more in the long-run because you have to keep replacing what you have.
  • transport costs me a ridiculous amount i dont have a car as i couldnt afford the car let alone the tax and insurance and cost of any repairs etc,so i use public transport everyday, it cost so much i have 3 kids and for me to go into my local town with them costs me £15 for a family return ticket so before i can even buy anything i need in town i am £15 down already, i hate having to spend so much.

    i find most things which are cheaper to buy are of inferior quality and so as someone who doesnt have lots of available money i feel cheated in pretty much every aspect of every day spending.

    there is a huge list of things that cost more for poorer people, i particularly hate those places that absolutely rip you off because you cannot afford to buy out right places live brighthouse who seem to be offering a wonderful deal for people who need to pay weekly and the tv adverts make them look great especially home in on them around the christmas period, these places are disgusting they charge stupidly high amounts for relatively cheap items,but items they no people like us cannot afford, so instead of paying £400 for a sofa they charge a stupid £1,000 for oh they pretty it up by saying you can pay low weekly amounts which you can but for a rdiculously long period of time, how is this allowed and why is it allowed to advertise freely all over the tv it shouldnt be allowed it is an outrage.

    ok sorry rant over ,i just find it very hard to bite my tongue or still my fingers when it comes to these things.
  • Short-term quick cash loans for an extortionate interest rate - they suck you in, but you struggle to pay it back the following month without borrowing again. All geared up to appeal to those with less...They really should all be made to live on their own credit, to see how they like it!
  • Butti
    Butti Posts: 5,014
    First Anniversary First Post
    Getting your money out. Have moved to a poor part of Newcastle for my year as a student and I have only found one cashpoint within a mile that doesn't charge to get your money out.

    Debt LBM (08/09) £11,641. DEBT FREE APRIL 2021.
    Diary 'Butti's journey : A matter of loaf or death'.
    Diary 2 'The whimsical tale of the Waterbed of Debt'
    48% off mortgage

    'one day I will be rich and famous…for now I'll just have to settle for being poor and incredibly sexy'. Vimrod Member of MIKE'S :cool: MOB
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