New analysis published by the TUC shows that household debt rose sharply over 2016, with unsecured debt (debt other than mortgages) reaching new highs. The TUC says weak wage growth has left more families reliant on borrowing to support their living standards. Continue reading New Year blues: sharp rise in household debt
Successful projects that have helped people cope with issues such as debt, mortgage worries and benefit problems will continue thanks to £6 million of funding. Among those succesful projects is Granton Information Centre, who increased one client’s household income by a staggering £15,000. Continue reading Easing the burden: funding extension for ‘crucial’ advice services
LOTHIAN RESIDENTS SPEND THE MOST ON NIGHTS OUT
People living in Edinburgh and the Lothian region spend the most money on going out, according to new research from the Bank of Scotland. Residents in Lothian topped the poll, spending an average £116 per month on nights out, according to Bank of Scotland’s How Scotland Lives report – £19 more than the national average spend.
Coming in second place, those living in Glasgow and Fife were both found to spend an average £104 per month on going out. While those in the Highlands & Islands came last, spending just £75 per month.
West Scotland and South Scotland also scored low on the report, with residents spending a mere £89 and £82 on going out.
The research also pinpointed Lothian as the region which spends the most amount of money on themselves and their partners, with residents forking out an average £98 per month – £14 more than the national average.
Central Scotland came second, spending £95 on themselves, and their partners. While South Scotland are the most frugal when it comes to splashing out on themselves and their partners, spending just £74.
As well as highlighting Lothian’s sociable side, the research report has also provided a comparison of what Scotland’s key regions spend more on, compared to other regions.
Residents in Aberdeen come out on top for rent, mortgage and car payments, while those living in Dundee spend the most amount of money on shopping for children.
Those living in Glasgow were found to spend the most on insurance premiums, while Highlands & Islands residents were revealed as spending the most amount of money on debt payment – and adult care costs.
A full snapshot of Scotland’s key regional spending habits:
| Region | What it spends more on compared to any other Scottish region* | Mean expenditure (per month) | Comparison to the national average spend (£) |
| Glasgow | Insurance premiums | £115 | £8 more |
| Lothians | Going out | £116 | £19 more |
| Shopping for themselves/a partner | £98 | £14 more | |
| Highlands & Islands | Paying off debts | £276 | £50 more |
| Adult care costs | £205 | £66 more | |
| Dundee & surrounds | Shopping for children | £102 | £14 more |
| Aberdeen & surrounds | Mortgage and rent payments | £527 | £104 more |
| Car payments | £182 | £36 more |
Scotland’s debt doubts
In addition to providing a snapshot of Scotland’s regional spending habits, the How Scotland Lives research report has highlighted the debt faced by many across the country.
In particular, 46% of Scots are carrying over at least some form of debt from the previous month.
More than half of debtors indicated they were concerned with their current financial position. This is particularly the case among 35-45 year olds, with 30% believing they will always be in debt.
Rachel Bright, Head of Customer Services at Bank of Scotland said: “While other regions spend more on necessity costs such as insurance premiums and debts, Lothian comes out on top for just wanting to have a good time.
“The research also paints a picture of the level of consumer debt in Scotland. It’s concerning that almost half of Scots aren’t paying off their debts from previous months and we would always encourage people to look at other areas to see if they can make savings that will allow them to pay off more debt.”
Debt charity workers expect today (Monday 15 February) to be their busiest day yet, following a record-breaking start to 2016. Continue reading Debt charity workers braced for busiest day
Charity offers top five frugal festive tips!
Christians Against Poverty’s (CAP’s) three Edinburgh debt centres in Tollcross, Edinburgh North and Wester Hailes have joined forces to release their top five ways to have a perfect Christmas without resorting to credit.
The team have compiled the advice so families can avoid seasonal slip-ups that can result in a miserable New Year where debts can spiral.
Edinburgh North CAP Centre Manager Claire Baggaley said: “We’ve put out this advice because we know what huge pressure there is to buy lots at this time of year and we want to be a voice saying that it’s OK not to spend loads – especially if money is already tight.
“None of your family and none of your friends want you to struggle through January and February with essentials like paying your household bills because you spent lots on them.
“If you are thinking of a Christmas loan or maxing out the credit cards or overdraft, please re-consider and take action to avoid worry in 2016.”
Wester Hailes CAP Centre Manager, Margaret Farquhar added that if anyone is already struggling with debt to seek help from one of the free debt agencies. CAP is one of these and can be contacted on 0800 328 0006.
New legislation aims to help the most vulnerable
New legislation comes into force today (Wednesday, April 1) which sees Scotland introduce one of the most modern systems of debt advice and debt management in the world.
The Bankruptcy and Debt Advice (Scotland) Act introduces a suite of measures, including the Minimal Asset Process, which offers debt relief quickly and at less than half the cost of an application for bankruptcy under the previous equivalent scheme for those on low incomes.
Accountant in Bankruptcy will oversee implementation of the new law, which has been designed to balance the rights of those in debt with the needs of creditors and businesses.
The introduction of the legislation is the latest element in the Scottish Government’s vision of a Financial Health Service for Scotland, which commenced with the launch of the Scotland’s Financial Health Service web portal in December 2014. The site is a one-stop shop for advice on a range of money issues, signposting users to organisations offering information and advice on debt, managing money, housing, homelessness and ethical lending.
Other measures as part of the new legislation include:
Business Minister Fergus Ewing said: “This new law places Scotland firmly at the forefront of efforts on how to help some of the most financially vulnerable in society.
“These measures have been developed following years of consultation with experts across the financial advice community and from studying how other nations deal with issues of personal debt.
“It is only proper that we seek to do everything we can to help financially rehabilitate families and individuals on low incomes and with little by way of assets who are struggling with debt, while still offering a fair deal for those owed money.
“Taken as a whole, this pioneering legislation seeks to bring dignity to those people in Scotland seeking to break the cycle of debt once and for all.”
It’s a tradition on New Year’s Eve that you make a resolution for the year ahead. Some people pledge to lose weight, others decide to stop smoking and lots more say they are going to get fit and more active – but all too often you break that resolution just a few weeks into the New Year.
If you’ve made a New Year’s resolution – and you’re really, really determined to stick to it this time! – here’s some help and advice to assist you on your journey.
Maybe this time …
1. LOSE WEIGHT and/or GET FIT
One of the most common New Year resolutions is to eat better, exercise more and lose weight. After all of the rich and indulgent feasts you’ve had this holiday season, it might seem easy to stick to a diet of leafy greens at first. But when those cravings set in, it can be hard to stay on track with your diet. Plus, cold weather makes it harder for some people to get motivated and hit the gym.
If you’re looking to eat more healthily, ignore faddy diets – portion control will play a big part in your success. One good way to be more aware of what you’re eating is to use a kitchen scale to measure ingredients or weigh out portion sizes. A solid kitchen scale shouldn’t cost the earth and it’s an investment worth making.
Check out the library for books on good food and healthy eating, and Pilton Community Health Project’s website is a mine of useful information too www.pchp.org.uk
Many people sign up for a gym membership at this time of year but for a considerable number that’s as far as it goes – it can be hard to get motivated to leave the house on cold January days and evenings; it’s so much easier to put it off to another day! Gym memberships can also be very expensive – again, Pilton Community Health should be your first port of call for local exercise and healthy activities.
With Ainslie Park Leisure Centre on your doorstep (551 2400) it’s worth checking out Edinburgh Leisure to see what’s on offer both locally and across the city: telephone 458 2100 or visit www.edinburghleisure.co.uk
If you need a little reminder to be active, a fitness tracker like the Fitbit Flex can be a big help, but starting at around £50 they are quite an expensive reminder! I find trying to tie my shoelaces is enough of a reminder for me …
2. QUIT SMOKING
You know smoking is a bad habit that hits both your health and your wallet, but stopping is tough – it can take some people years and many, many failed attempts before they kick the habit. If you want 2015 to be the year you finally quit smoking, there are all kinds of products that can help wean you off the fags: there’s gum, patches and nasal spray inhalers – all of which help give you a boost of nicotine without having to inhale all that nasty smoke.
Many are turning to e-smoking as an aid to kicking the tobacco habit. If you’re looking to try out e-cigs as a way to cut back on actual cigarettes, you can now get a starter kit, charger, and carrying case set at increasingly competitive prices.
People who are trying to quit smoking the traditional way also appreciate having additional support options, and Allen Carr’s Easy Way to Stop Smoking book is still the most popular on the market.
NHS Lothian offers a range of stopping cessation sessions and Smokeline Scotland is also a great place to go for support, advice and tips.
http://www.nhslothian.scot.nhs.uk/HealthInformation/HealthAwareness/Smoking/Pages/default.aspx
Smokeline 0800 848484 www.canstopsmoking.com
3. SAVE MONEY AND REDUCE DEBT
Whether you want to get out of debt or just start saving for a big ticket item, there are lots of people who will be trying to spend their money more wisely in 2015. Setting up a personal budget can help you monitor your spending.
One tactic you can try to help you stay on budget is doing all your shopping in cash when you can, rather than using a debit card, cheque or credit card to pay for items – it’s estimated that people who pay for things with a card can spend almost 20% more on a transaction than those who are paying with cash.
If you’ve racked up a lot of debt on a credit card and you’re paying a hefty rate of interest, you should look around to see what deals are on offer and transfer that debt over to a 0% balance transfer credit card. By doing so, you’ll be able to avoid paying interest on that debt for a set period – some up to 35 months – and this will give you plenty of time to start tackling your debt without worrying about the interest accumulating.
The Money Advice Service has a good website for money saving advice, but if you are already in debt – get help, don’t let your problems escalate. Pilton CAB and Granton Information Centre are two local agencies that can help.
Don’t be tempted by payday loans or worse – the interest is astronomical. Check out Credit Unions which are a much cheaper and ethical way of helping you to manage your money.
Remember, if you spent too much over Christmas those bills will be arriving soon, so ACT NOW.
www.moneyadviceservice.org
www.moneysavingexpert.com
www.capitalcreditunion.com
North Edinburgh Credit Union, Wardieburn Drive 466 5006
Granton Information Centre, West Granton Road www.gic.org.uk 551 2459
Pilton CAB, Drylaw Shopping Centre on Ferry Road 202 1153 www.citizensadviceedinburgh.co.uk/
The Scottish Government has also just launched a new website to help guide you to the support and advice you need. Visit:
http://www.lightentheloadscotland.gov.uk/
4. LEARN A NEW LANGUAGE or SKILL
It’s never too late to learn something new and the New Year is the perfect time to try something different, whether for leisure or to open up new employment opportunities.
Locally, check out Edinburgh College – new courses start this month – and Craigroyston Community High School is running a wide variety of adult day and evening classes.
www.edinburghcollege.ac.uk
www.edinburgh.gov.uk/info/20070/adult_and_community_learning
5. GO GREEN
Thinking about going green this year? There are lots of small changes you can make to your lifestyle to reduce your energy bill, recycle materials in innovative ways and help do your part to make the planet healthier. www.greenerscotland.org is a good place to start for ideas.
6. VOLUNTEER and/or GIVE TO CHARITY
Many people plan to be more generous with both their time and any disposable income they may have in 2015 (some chance, I hear you say!)
Looking to donate time, not money, then? There are lots of ways you can donate your time – local and national charities and voluntary organisations are crying out for willing volunteers in all sorts of roles. There’s bound to be something to suit you – a good place to start is Volunteer Centre Edinburgh – go to www.volunteeredinburgh.org.uk to see what you can do.
Time Banks are another great way to donate your time, energy and skills and get the same back in return – visit www.edinburghtimebank.org.uk for more information.
So, you’ve decided on your resolution? Here are some tips to help you stay on track when times get tough:
GOOD LUCK!
Campaign to highlight money advice service launched
A campaign to signpost people struggling with debt to the full range of money advice services available has been launched by the Scottish Government.
The Lighten the Load campaign raises awareness of the Scotland’s Financial Health Service website, which provides links to bodies offering information and advice on debt, managing money, housing, homelessness and ethical lending, encouraging those with money worries to take the first steps towards regaining control of their finances.
The campaign, which is aimed at people from all walks of life in Scotland seeking credible answers to issues connected with debt and money, includes a new television advertisement themed around how everyday tasks become more difficult when people are burdened with debt.
The Scottish Financial Health Service website was created by the Accountant in Bankruptcy and was launched by Business Minister Fergus Ewing in December.
Mr Ewing said: “January can be a difficult time for families when the bills associated with the festive period start to come in, but it can also be a time when people turn their attention to their finances for the year ahead.
“This campaign is intended to encourage people to access the full range of financial advice services available to help them manage their money in the months ahead.
“Since it was launched by Accountant in Bankruptcy last month, Scotland’s Financial Health Service has already been making a difference to people seeking guidance on how to prevent worries about money turning into a crisis.
“Launching this campaign will empower even more people to lighten their own money load and take back control of their finances.”
As well as providing access to debt support services, the Scotland’s Financial Health Service website also signposts users to practical credit and protection solutions offered by credit unions across Scotland.
Frank McKillop, Policy Manager at ABCUL Scotland (the Association of British Credit Unions Limited), said: “Helping people get – and stay – on top of their finances is a key part of what credit unions are all about.
“We welcome this campaign, and hope that through Scotland’s Financial Health Service, more people from all walks of life will turn to credit unions and take a responsible approach to saving, borrowing and budgeting.”
Scotland’s Financial Health Service website is available from today at:
‘Today’s crackdown on the payday lending market comes not a moment too soon’
A cap on the cost of payday loans has come into effect. Payday loan rates will now be capped at 0.8% per day of the amount borrowed, and no-one will have to pay back more than twice the amount they borrowed.
The Financial Conduct Authority (FCA) said those unable to repay should be prevented from taking out such loans.
Payday loan customers will see the fees and interest they pay capped from today amid moves to stop such debts spiralling out of control.
The new rules mean that people using payday lenders and other short-term credit providers will see the cost of their borrowing fall – and those who cannot afford to repay their debt on time will never pay back more in charges than the sum they initially wanted to borrow.
For all high-cost short-term credit loans, interest and fees must not exceed 0.8% per day of the amount borrowed.
The Financial Conduct Authority (FCA), which oversees the industry, said the move will lower costs for most borrowers and ensure that charges are proportionate to the size and duration of the loan.
Default fees for borrowers who fail to repay on time will be capped at £15 under the measures, which are the latest in a string of clampdowns on the much-criticized sector.
The new rules mean that, for example, if someone borrows £100 for 30 days and pays back on time, they will not be charged more than £24. Someone who borrows £100 but struggles to repay their debt will never pay back more than £200, including fees and charges.
Short-term lenders said the caps will lead to fewer people getting loans from a smaller group of lenders. They said that initially at least, the cost of a payday loan will generally be at or near the cap.
Stricter rules for credit brokers are also being applied from today. Concerns have been raised that consumers have often mistaken credit brokers for lenders.Royal Bank of Scotland (RBS) recently highlighted a case involving someone looking for a £100 loan who ended up being charged £700 because their details were passed to 10 different middlemen firms.
The FCA has previously seen evidence of fees being taken by credit brokers without informed consent and under hidden or misleading terms and conditions. Under the new rules, a firm will not be able to request a consumer’s bank details or take a payment without their explicit consent first.
Martin Wheatley, chief executive of the FCA, said the payday loan cap will make the cost of a loan cheaper for most consumers.
He said: “Anyone who gets into difficulty and is unable to pay back on time, will not see the interest and fees on their loan spiral out of control – no consumer will ever owe more than double the original loan amount.”
Consumer group Which? said its 2014 research found that an average of 880,000 households took out a payday loan each month.
It’s ‘Clear Up Credit” campaign said the regulator should look to make it easier for people to compare the cost of different types of debt, including unauthorised overdrafts and credit cards.
Which? executive director Richard Lloyd, said: “Today’s crackdown on the payday lending market comes not a moment too soon. Lenders must now start competing on price and treating their customers fairly.
“The regulator has clearly shown it’s prepared to take tough action to stamp out unscrupulous practices, and they must keep the new price cap under close review. It’s now time to turn the spotlight on unfair practices in the wider credit market.
“We want to see an end to excessive fees that also make it hard to compare different loans, including those charged for unauthorised overdrafts and credit cards.”
The payday loans industry has undergone a series of shake-ups since coming under the regulation of the FCA last April.
The Office of Fair Trading, FCA’s predecessor body, expressed concerns that some payday firms appeared to base their business models around people who could not afford to pay back their loans on time, meaning the cost of the debt ballooned as they were forced to ‘roll it over’ – and extra fees and charges were added on top.
After coming under the FCA’s supervision, payday lenders were banned from rolling over a loan more than twice and and they can only now make two unsuccessful attempts to claw money back out of a borrowers’ account.
Russell Hamblin-Boone, chief executive of the Consumer Finance Association, which represents short-term lenders, said: ” This is the start of a new era for short-term lenders who are operating in an entirely new lending landscape under the FCA.
“We expect to see fewer people getting loans from fewer lenders and the loans on offer will evolve but will fully comply with the cap.
“The commercial reality is that the days of the single-payment loan are largely over – payday loans are being replaced by higher value loans over extended periods.
“Initially, prices of loans will be at or near the cap. In time we may see risk-based pricing, but innovation could be stifled by the threat of the regulator as lenders seek FCA authorisation.”
The FCA said the reforms needed time to bed down before their effect was assessed but that it would be monitoring the situation carefully. The reforms will be reviewed in two years.
Hitting the shops to start your Christmas shopping? Or shopping online, maybe? However you shop, it’s far too easy to get caught up in the annual festive shopping frenzy. Here are some seasonal tips from Citizens Advice Scotland to help make sure you don’t start the New Year with a debt hangover …
