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3.2 million households in problem debt

(126 Posts)
DollyBarton Tue 23-Aug-16 11:03:47

And an increase of 200k children in poverty than last year. How is this happening! From my own experience I can see companies squeezing workers for the benefit of shareholders especially since 2007. AIBU to think the lack of fair wages is the biggest reason for most households debt? On a micro level I'm sure some people lack money management skills and splurge where they really shouldn't but workers are given so little to live on.

SquidgeyMidgey Tue 23-Aug-16 12:12:45

I think it's both. Some people aren't paid enough to cover the basics, some people spend what they haven't got on non-essentials.

SquidgeyMidgey Tue 23-Aug-16 12:16:05

Posted too soon. There's a real culture of entitlement now, too. People think they're entitled to x because they want it and they want it NOW on tick because they don't want to save for it. And that's 'normal' now which removes the stigma or silences the little voice that says 'wait...'. Some people simply can't cover their rent, bills and food and they are the ones we need to help.

MarcelineTheVampire Tue 23-Aug-16 12:19:42

I think you are right OP businesses do not pay their workers enough but I also think it has to do with austerity too- government have chosen to cut services/welfare that affects the most vulnerable in society and this in turn leads to child poverty.

On a side note, many people I know have lots of things on finance/credit and don't realise that they are only a few months away from bankruptcy if they were to lose their job. I think a culture of credit isn't helping and also a lack of basic budgeting skills- I firmly believe this should be taught in schools as an essential part of the curriculum.

RubyWho Tue 23-Aug-16 12:20:25

Because the cost of living is so high as to be ridiculous, especially in the South. And especially in London.

I make a 'decent' wage, but my rent, bills, cost of living is so high that I rely on getting into debt to be able to cover everything every month. Almost everyone I know is in a similar position.

It's not always a sense of entitlement, and wanting things now. Unless the things you want now are, you know, not to be evicted due to missing your rent payment.

pallasathena Tue 23-Aug-16 12:37:01

Low wages, stagnant wages and an economy that relies upon 'growth', to justify its existence are the prime factors currently. Add in the economics of low interest rates outperformed by rising house prices/rents and you have a perfect storm economically speaking.
Most people are literally two pay-checks away from penury. Average savings for those in work would just about cover three months outgoings on a mortgaged semi plus living expenses. I know of several families where both parents are working long hours and fearful of redundancies or shorter hours working contracts because that appears to be the new normal.
And there's not one feckless one there to point a finger at either!

caroldecker Tue 23-Aug-16 12:46:17

Are we counting poverty as living in a household with an income below £284 a week or c£15k a year?

Millionprammiles Tue 23-Aug-16 14:16:33

The lack of a genuine living wage. Wages falling in real terms since 2007 (and even earlier than that for some).

Erosion of employee rights, greater exploitation of employees and demise of protection for employees from Unions.

Rising property prices, high rents and exploitative landlords (and little protection for tenants).

Cuts and changes in benefits. A benefit system that's slow to respond to changes (and can't cope with concepts such as zero hours contracts).

Or depending on your point of view its all down to people insisting on multiple big tvs and several foreign holidays a year.

brasty Tue 23-Aug-16 14:21:18

Wages have fallen in real terms.
In terms of getting into debt, the generation of students who had to get into debt to go to University, have grown up comfortable with debt. Being in debt used to have stigma, that has long gone.

MindSweeper Tue 23-Aug-16 14:31:59

there's currently a thread in which someone has 15k worth of credit card bills and now is debating more debt for a holiday. Like squidgey said it's a two very different groups of people but both ending up in similar positions.

MrsTerryPratchett Tue 23-Aug-16 14:37:38

Housing and food are so expensive and crappy shit like phones and holidays are so much cheaper that people do end up looking 'entitled'. But the fact is that we have a situation where the things my parents would have thought of as necessities are out of reach for lots of people.

SquidgeyMidgey Tue 23-Aug-16 14:51:43

MrsTerryPratchett, i can see that but my DH left school at 16, saved every penny he could instead of drinking and going to magaluf, mortgaged himself up to the eyeballs to buy his first house with a crappy old car and borrowed deckchairs to sit on. His DN is late 20s, works very part time, spends everything she earns on make up and holidays then says she is Entitled to a subsidised property because she can't afford to buy. Boils him up a little.

Bare necessities aside it's about priorities. A few years of not-iPhone and not going abroad gives the savings for a SO property deposit. Depends what a person actually wants in life.

ThatStewie Tue 23-Aug-16 14:59:48

According to Gingerbread, there is 4 BILLION in outstanding child maintenance and half of single parent families living in poverty wouldn't do so if fathers actually paid maintenance (and, yes, it's mostly men who don't pay). I wonder how much of that debt is from single mothers having to buy food on credit cards.

witsender Tue 23-Aug-16 15:05:08

As a food bank worker, low income is the second biggest cause of referral.after benefit sanctions.

witsender Tue 23-Aug-16 15:06:15

Saved every penny of what Squidgy? Not many jobs around, and with high rents/sparse social housing most people are on the bones of their arse. Not choosing between holidays and savings.

Dawndonnaagain Tue 23-Aug-16 15:12:54

Squidgy DS1 was a bank manager, now in another job. He is 31. He doesn't smoke, rarely drinks and can't afford holidays, let alone saving for his own property. This is the reality of things today. By the time he's paid petrol, car tax, insurance, rent, food, there's sweet f.a. left for savings. A bank manager, yes, you read that properly.

MrsMargeSimpson Tue 23-Aug-16 15:14:46

I've gone back to work this year. Previously I was a full time carer to or disabled child. Childcare costs so much that since this we have seen a significant drop in our income/disposable income. We are unable to meet minimum payments that, this time last year, we were able to meet easily before. We have no money left and have had to stop paying at all just so that we can eat.
That there is the problem. How on earth in 2016 can we be significantly worse off because two parents are working instead of one?

PageStillNotFound404 Tue 23-Aug-16 15:15:56

Bare necessities aside it's about priorities. A few years of not-iPhone and not going abroad gives the savings for a SO property deposit. Depends what a person actually wants in life.

Since you think personal anecdotes are important, SquidgeyMidgey, here's mine. We haven't had a foreign holiday for nine years and my iPhone is provided by my employer. We're still stuck in (unsubsidised) private rental with no prospect of ever getting on the property ladder. In a good month - maybe 50% of the time - we can afford to save about £100. House prices are rising faster than £600 a year so we're never going to catch up.

We're not feckless and we don't suffer from instant gratification syndrome. My DH is disabled and the help and support for the disabled sector of the population has been slashed - not just the obvious benefit cuts but out in the wider community. Treatments and assistance that ten years ago would have been available on the NHS or via local community organisations has disappeared, and the percentage of my salary that is needed to 'top up' his benefits to afford to pay private sector suppliers for the things he needs is steadily increasing.

We're not in poverty, but we're increasingly worse off than we were ten, five, two years ago in real terms. And we're far from unique.

MrsMargeSimpson Tue 23-Aug-16 15:16:21

To clarify - we have not been on holiday this year. We do not smoke or drink. We don't have hobbies. DCs have no after school activities bar Cubs which is a tiny expense at £100 a year for 2. We have nothing more to cut back on. It's shit.

SquidgeyMidgey Tue 23-Aug-16 15:22:14

My personal anecdote was solely in reply to MrsTerryPratchett's post. I haven't actually said or implied that I think everyone is debt is stupid with money, unless someone wants to quote it from somewhere? All I've done is suggest that not everyone in debt is there through paying for life's essentials, but by all means spit your venom at me if it helps.

MindSweeper Tue 23-Aug-16 15:22:22

DS1 was a bank manager, now in another job. He is 31. He doesn't smoke, rarely drinks and can't afford holidays, let alone saving for his own property. This is the reality of things today. By the time he's paid petrol, car tax, insurance, rent, food, there's sweet f.a. left for savings. A bank manager, yes, you read that properly

Me and my DP are in a similar position. We cannot afford holidays and it's all tightly squeezed. It takes a lot of financial planning for us to stay afloat.

But a LOT of my friends who have minimum wage or just above jobs go on holiday, I don't know how they manage it and I would love to ask but obviously that's not the done thing. I don't know if it's because they have more disposable income because they are entitled to different benefits, housing help, childcare help etc whereas we aren't, or maybe it's debt, I have no clue.

I'm not saying their situations are better than mine or vice versa mind, before people start saying im creating a flat screen TV argument, it's just an observation. I think there's a group of people in society who are stuck in the middle, don't earn enough for luxuries but don't earn as little as to be entitled to government help.

SquidgeyMidgey Tue 23-Aug-16 15:31:28

BTW the only foreign holiday we as a family have ever been on was a weekend in France. We don't have fancy phones, new cars, our only TV is a tiddly 32", we don't wear designer gear or go drinking on a weekend. We came within a cat's whisker of losing everything in the recession and have literally clawed our way back over years, DH's mobility is restricted and declining through degenerative neuropathy, we support 3 ailing elderly patents as well as running our own tight ship. Does that make sainted or better than someone else? Does it heck as like, but I've been in a crap spot and I know how hard it was. I'm not unsympathetic, I've just got no tolerance of the modern entitled mentality. Please no one bother to twist that into being discriminatory against those in genuine need, it's clearly not what I've said.

Boogers Tue 23-Aug-16 15:57:32

Everyone has their own story of debt and hardship and I don't want to go into mine, but discussions like these always seem to boil down to perceptions of fecklessness and instant gratification when actually it's far from that. If you're in a spiral of debt, where you're struggling to make ends meet and borrow from Peter to pay Paul, where you raid the shrapnel jar to buy a loaf of bread, it's hard to see a way out of that.

SquidgeyMidgey Tue 23-Aug-16 16:08:18

Boogers, nowhere on this thread has anyone said everyone in debt is feckless. I dared to suggest some people are and that's been latched onto. There's no point expressing an opinion on here sometimes if it doesn't fit the accepted pattern.

Boogers Tue 23-Aug-16 16:13:50

Squidgey I didn't say everyone, I said perceptions. And you were the one who mentioned a culture of entitlement. People buying expensive luxury non-essential goods and then crying poverty are not the ones we're on about. It's people who struggle to make ends meet and struggle to provide even the basics.

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