3.2 million households in problem debt

[DollyBarton]

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.

In terms of housing costs, what is important is the monthly interest payment. What a stupid thing to write. The deposit stops people getting on the housing ladder, then they, as a result of this and the larger debt, have to pay for more years meaning their retirement is screwed. And they can't then save or help their children out meaning their children are screwed too.

Niloufes

Your stand alone post at 14:37 was, at best, ill-judged and, at worst, goady. If you can't handle being pulled up for such a twatty comment then maybe it is you who shouldn't post on here. You may be a feckless twat, most of the people posting on this thread aren't.

We would struggle now MrsTP, if we had to save for a deposit. We were lucky and got a 100% mortgage and bought before the prices rose stupidly. We are now under 60% LTV and pay a small mortgage each month. I feel really sorry for those who are never going to be able to save for the deposit and face an uncertain rental sector. There are many other things loaded against you on a low income, such as when things go wrong you struggle to afford to replace them. We've been there. I also remember sitting in candlelight because we had no money to top up the electric. It wasn't romantic at all.

We live hand to mouth each month. We earn a decent chunk between us. Mortgage costs and childcare cripple is each month. I pay the same for childcare as we do for housing. It only going to get worse as dc1 starts school and I will have to pay a childminder to take and pick up adding another £30 per week to childcare, dc2 doesn't get funded hours till next year. My wages went up by 1%.

Looks can be very deceiving. We were very well off until DH got made redundant twice in 6 years. We have 2k on a credit card and a 5k loan (car died and we needed a new one, could have got a cheaper one but went with one with low mileage in hope to keep costs down for the next few years) we now struggle each month.

When DH was made redundant the last time he took a job which was very very lowly paid, we had to use the credit card to buy food and eat. I spent less than £30 a week on food for us, if the children needed nappies that was £25 a week for 2 adults, and 2 children. It was tough, me and DH didn't eat a main meal some days so the children could. We debated getting rid of our animals to cut costs but no shelter could take them they had a 6 month waiting list (they did give us a massive bag of dog food)

I ran my car on fumes, literally praying it would get me to work and back. Life was very bleak, I cancelled sky, our phone line, swimming was stopped. Sold everything I could find to sell. We both became depressed. Couldn't sell the house as renting was just as expensive, made no sense. I couldn't afford the children's new shoes (my mum ended up helping) My work had no extra hours to offer and even if they did I couldn't have afforded the childcare. Was a very bleak time and nearly destroyed our marriage. I still feel guilty as my children were classed as in poverty during that time.

To the outside world we look very wealthy nice house nice cars (one is now a company one) but we are still poor trying to drag ourselves out of debt.

Scares me that I have no savings, until we are out of debt it's not going to happen. Hopefully we now have secure jobs and we can stabilise our financial situation.

I am a feckless twat.

Can I add we had some savings but DH was out of work for 5 months it's amazing how quickly they disappeared, plus very little redundancy money. Then a low paid job which covered the mortgage and council tax but nothing else. Was a horrible horrible time.

GoodGirlGoneWrong I wanted to post my story, but it's the same as yours, almost identical. Very hard, when life throws a series of curve balls.

Government publications on the economy have sometimes talked about household debt, but not much or enough IMO.

I was in debt for years as a struggling single parent. Benefits were too low to make ends meet and have a decent quality of life, so bills and every day costs had to go on the credit cards and catalogues. I went bankrupt a few years ago and it was such a relief to put those debts behind me. Luckily I rent a council flat so wasn't in danger of losing my home. It must be hard for those with mortgages who would have to face homelessness if they went the same route.

Until recently we had to use a bit of the credit card each month when the wage ran out and it built up. We are only now paying it back due to some extra freelance work, but it just wasn't manageable on an average wage. Credit card companies seem to be lending easily again and raising balances by a lot.

Oops posted too soon!
A lot of our debt came from not having savings available for emergencies e.g. car needing lots of work etc. Just haven't had chance to save and we don't spend money on anything apart from food and bills.

Wages haven't risen for a lot of people in real terms since 2008. I work for public sector and our terms and conditions have been pared to the bone. The unions seem useless in standing up for the ever diminishing employee rights.
Tax credits have been a lifeline for many, but have served to prop up poverty wages. And now the rules are changing for tax credits, many people have had this safety net taken away. Many people have to pay council tax who previously didn't. Public transport costs and rents have skyrocketed. In my work I have referred people to food banks who literally have nothing. No electricity, food, or money. I fear for the future, I really do.

Average savings for those in work would just about cover three months outgoings on a mortgaged semi plus living expenses.

If only this were true then there wouldn't be a problem!

Stagnant wages aren't the problem. Stagnant wages are OK if house price inflation especially in the southeast wasn't so high.

But what do you expect with record low interest rates for years?

Stagnant wages are not ok habanero. The cost of everything (not just housing) is going up all the time. Of course it then becomes more difficult when you have less money to go around.

I too havn't had a payrise since 2008. And had to sell the family home as a result of a nasty divorce. I rent now with no hope of saving enough money for a deposit and ironically pay more in rent than I ever did (or would) with a mortgage. That's the trap people find themselves in.

I too think there is a difference between those who can't afford essentials and those who can't afford luxuries and it's a shame that some can't distinguish between the two.
We need to help those who can't afford essentials due to low wages, disablement, illness, redundancy etc.
If people have been silly enough to get into debt for none essentials, luxuries and greed then surely they don't need financial help, they earn enough for necessities.

I have s friend who continuously takes on more and more debt because she "needs" things to the point it's ducking ridiculous. Her DH earns £20k ish and they owe £22,000 they are bankrupt but he won't go bankrupt "again" so they pay the min every month and that will be their lives now until the kids leave home. Would be fine but the stress he feels is visible on his face

We live in poverty because my other half's job doesn't pay a lot (but a tiny bit above national minimum wage, so we don't get any of the "support" on offer). He hasn't really got the opportunity for a better paid job either, as his bachelor's degree is so outdated now.

I can't work because it doesn't pay for childcare + transport + to weigh up for loss of housing benefit. It absolutely sucks and I can't see a way out until little one starts school, which is another 2 years away! :(

A lot falls to individual choices, far to easy to blame on housing and the government.

Some jobs only pay minimum wage but take no skill, other jobs pay higher due to qualifications, experience, skill set etc. They can't all be high paid jobs as the ones at the top would simply rise to have the pay gap and in turn prices of everything else rise.

People want it all, never stopping to look if they can afford it or what happens in the event life takes an unexpected turn. Easier to blame on others than take responsibility for poor choices and decisions.

A lot falls to housing and unaffordable cost of living, far too easy to blame individual choices.

This thread should've taught you that some low paid people simply don't have enough to live on, much less to save against the rainy days that hit most of us some time or other. The existence of some people who have enough money and simply don't manage it properly doesn't cancel them out, any more than vice versa. Chuntering on about people wanting it all and personal responsibility without even mentioning the need for some people to take credit simply to continue running a household just makes you sound like you don't live in the real world.

A lot falls to housing and unaffordable cost of living, far too easy to blame individual choices

This

Stagnant wages are not ok habanero. The cost of everything (not just housing) is going up all the time. Of course it then becomes more difficult when you have less money to go around.

yes, there is inflation. but that's the problem, not stagnant wages. if there was little inflation, we'd be fine.

If my wage had gone up with inflation I'd be 5k better off. There's a time I felt much more comfortable but it's slowly slipped and it's only when I think about it that I realise just how much

THe US and UK have both seen very little inflation including wage inflation over the last 10 years. It is almost unprecedented in recent times. I recently increased some charges I make to those who pay me and it was very hard even though the changes were only inflation over 15 or 10 years.
Also as we all know rents in areas where there are jobs are very high (not necessarily in other area and plenty of us have always had to commute expensively and difficultly when you have babies in childcare - it's very very hard indeed) from areas where housing is cheaper to where work is. Add a night up with babies, 2 hours plus commute and a full time job as a new father or mother and life is very tough indeed. However those in work are envied of course by those in areas where it is very hard to get any kind of full time or part time job at all.

What are the solutions? Apart from a change of system (go and watch the Propaganda Game on Netflix if you can afford Netflix - fascinating film I watched about North Korea yesterday where housing is free and you are paid by the state), on an individual basis people just have to struggle on. Lots of us live with parents or house adult children in cramped conditions whichh probably council housing would not allow, 2 somethines flat or even room share or sofa surf, many of us now and in the past put off babies until we are nearly 40 in order to be able to afford them. Life is tough.

I do think working full time and having 2 or 3 jobs can help by the way. Obviously the biggest help is doing well at school and picking jobs based on pay levels. No wonder local schools are full of teenagers wanting to be doctors and lawyers. That definitely works as a route out of poverty if you can pass the exams.

I think a second income stream is a must, the only time I haven't had one I've really really struggled.