Consumer Debt - It's a Matter of Timing

CONSUMER DEBT IT'S A MATTER OF TIMING LET'S START WITH THE GOOD NEWS 30000 25000 ----- 20000 ----- 15000 ------ 10000 ---- 5000 2008 2009 2010 2011 2012 Year THE AVERAGE DEBT PER PERSON CONTINUES TO FALL EACH YEAR But that doesn't mean we're any better at coping with it For 78% of people, problem debt has undermined their self- confidence and ability to support themselves or their family. HIGH RISK SELF-EMPLOYED 1 OVER 60S On average, the self-employed owe 10K more than other people Over-60s have the highest level of unsecured debt (over 22K) BUT WHAT ARE THE COMMON CAUSES OF DEBT? 18 19 25 10 5. Unemployment / redundancy (25%) Reduced income (19%) Other (18%) Lack of budgeting (12%) Disability/injury/illness (11%) Separation/divorce (10%) Credit for living expenses (5%) AND WHAT ABOUT THOSE MOST VULNERABLE TO DEBT? 7% said that they were receiving benefits because of an incapacity preventing them from working and 30% of this group still have more money going out than they have coming in - even after receiving debt management advice It can take a while for the cogs in your mind to click into place before you can admit that you've lost control of your debt 40% 63% of people struggle with mounting debts for at least of people that need debt advice don't seek it within adequate time a year before seeking help VERY OFTEN THESE PEOPLE CONTINUE TO BORROW, HOPING THEY CAN SORT IT OUT LATER 2000 As mainstream lenders 1800 start denying credit, borrowing options are limited to only high cost products. 1600 1400 1200 1000 800 600 High cost options such as catalogues and payday loans are increasing 400 200 2010 2011 Year 2012 every year. Catalogue Pay day loans Some payday loans have interest rates as high as 5,000% APR Over 65 percent of clients with a payday loan have contractual payments worth more than 100% of their income IN OTHER WORDS.. PERPETUAL DEBT SO IF YOU FIND YOURSELF ROBBING VISA TO PAY MASTERCARD DON'T WAIT FOR THINGS TO FIX THEMSELVES.O SA HELP AND ADVICE IS AVAILABLE WITHOUT COSTING YOU A PENNY.. payplan Citizens Advice the charity for your community THE BURDEN OF DEBT DebEA DOESN'T SHIFT BY ITSELF. trust ACT NOW.Shange debt help and adv my money steps housingadviceNI CAP Debt Charity BROUGHT TO YOU BY: DEBTCHARITIES: http://www.debtsupporttrust.org.uk/ http://housingadviceni.org/ http://www.debtaction-ni.net/ http://england.shelter.org.uk/ http://www.payplan.com/ https://capuk.org/ http://www.debtadvicefoundation.org/ https://www.mymoneysteps.org/ http://www.stepchange.org/ http://www.citizensadvice.org.uk/ The w. Wallet Doctor http://thewalletdoctor.com SOURCES: The effectiveness of debt advice in the UK; Money Advice Service; 2012 Debt Advice in the UK; A report for the Money Advice Service by London Economics; 2011 Working Households experiences of debt problems; A research report prepared for ŚtepChange Debt Charity by the Personal Finance Research Centre, University of Bristol; 2012 Over-indebtedness in Britain; Kempson; 2002. Drivers of over-indebtedness; Disney et al; 2008. Labour market statistics February 2013; data table A06; Office for National Statistics Time limit Contributory Employment and Support Allowance to one year for those in the Work-Related Activity Group Impact Assessment (2011), Department for Work and Pensions Financial Conduct Authority - Detailed proposals for the FCA regime for consumer credit; October 2013 StepChange 2012 Statistics Yearbook Debt Amount = •=• Amount