Pay to be Poor

[LetterBug]

Got sent into an un- arrangement overdraft and it costs £30. So you are fined for having no money. Meaning when I'm paid I will be £30 down from the off. Meaning I will more likely run out of money again. costing another £30.

Pay to be poor.

Thanks for comments re scout subs - we don't qualify as a low income family so not entitled to any financial help with anything. I can afford the installments just not all in one go.

I rent and have smart meters. You don’t have to have prepayment meters if you are renting your home.

But if properties with key meters are the only ones available to you, in your budget, you can’t choose to replace it without the landlords permission. And ones with key meters are the cheaper properties available. I’ve rented many times over the years and it was only when I was moving out of budget accommodation that properties weren’t key meters.

Yes it’s high but you did agree to the terms and conditions of the account when you opened it. Probably better than them not granting you the overdraft and your payment bouncing?
Can you get an arranged overdraft or other credit facility to use instead next time?

Its my understanding taht the days of expense accounts a la Jerry Ledbeater are gone. DH had one some 15 years ago but he was taxed on it and on his company car and the car allowance that replaced it.

@fluffythedragonslayer

Oh yes, it's expensive being poor! We have to pay everything in installments rather than one upfront payment and so many things cost extra that way. Even Scout subs. We can't afford 3x£75 in one go, so we pay 3x£30 in three installments. And end up paying £45 more than those rich folk who don't have to count. Literally everything is cheaper if you can pay it all in one go. Which we never can. When we got our mortgage we had a crap rate because we had low income and not perfect credit score. Yup. It's expensive being poor.

@fluffythedragonslayer Please speak to your scout group, this is totally unreasonable. In addition they should have access to District funding for low income families. In fact, if they won't budge it might be worth contacting District yourself. (I'm a scout treasurer).

Rent is another example. I had a reasonably decent job but had to rent as started from nothing again following a relationship breakdown. Rented the lowest priced house I could find big enough to house us all.

Landlord put the house up for sale 2 years in. I did a mortgage cost calculation and it came in at just over £500 a month LESS than what I was paying in rent.

I couldn't buy it though because the banks said I didn't earn enough to cover what I'd need as mortgage. As single income and had dependants, Even though I'd been paying £500 more in rent for the last 2 years.

If I'd been able to save a bigger deposit, there may have been a chance, but my salary didn't allow for anything left over after rent and bills. If I'd been able to get the mortgage I could have saved £12000 over the next 2 years.

I'm still in same situation with another house, actually paying more rent, as nothing available which was cheaper.

I hate that banks don't take this into consideration, it would allow so many people to get on the housing ladder if they took into account what someone had been paying for x number of years without default.

Definitely ring the bank and tell them you are having financial difficulties. If there is any other reason you might be vulnerable, tell them - they should help.

But I am confused because banks shouldn't be charging fees any more, the big banks charge interest of c. 40-50% per day but that would only be on the days you are actually overdrawn. And most cap the amount charged per month, as well. £30 in interest would mean that you're maybe a grand overdrawn every day of the month.

www.moneysavingexpert.com/banking/cut-overdraft-costs/

I knew an economic historian once, a very posh ex-marxist who'd say in his expensive accent 'it's expensive to be poor.' So true, and so fixable.

Mind you, it's widespread. When I worked in Tanzania, you'd get poor villagers sometimes buy one pack of tea leaves or a few packets of cigarettes and then repackage them, selling the cigarettes one by one and the tea in two-soupspoon portions rapped in newspaper.

These small portions were so cheap that even ppl who never (or at least not currently) stretched to a whole bag of tea leaves could afford them. But relative to the amount bought, they were much more expensive. So the poor overcharged the poor to get by.

And they dont HAVE to let the DD go through that pushes you into your unarranged overdraft or let you draw out money that pushes you into it either, but why would they stop it when they can hammer you with a £30 fee and charge you daily fees.

Of course they do. A DD is an instruction to your bank to pay an amount. If your account has an overdraft facility they can dip in to it. If you don’t want that, and would prefer payments to be rejected, ask for your account to have no overdraft facility. But if you know a DD is going to put you in to overdraft, call your bank.

Definitely. I missed a DD on two mobile phone payments from my account.
It cost me €40.00.
The money was there on the second attempt, I deposited the money.
Similarly payments by the week on products are much higher.
The local legal loan man charges 40% iinterest.

@Skyll

When I rented my landlord didn’t allow me to change supplier. I know they’re not supposed to restrict that it they did.

If you’re on a standard meter (I’m not sure about how it works with prepayment) and you pay the bills yourself then there’s nothing they can do to stop you. We changed a couple of times and when we moved out just told the landlord who the provider was.

The scouts charge you more for not paying all at once? That is outrageous- I'm a leader in beavers and we would never do that. We try and find way s to make life easier for those parents we know are struggling. Definitely speak to the GSL about that - it's completely out of line.

@EatSleepRantRepeat

The only time we get lunches and dinners paid is if we're entertaining clients, because we're working during that time. I'd rather be at home with my husband than having to fake being nice to Letchy Ted, but it's part of our job. Even in the case of David Beckham given above, the company have decided its worth them paying for it (its not free!) to build client relationships which bring in more revenue than it costs.

If you don't want to pay 3x subs for something, don't send them or don't have 3 kids. I do agree about bank and overdraft fees though, they're extortionate. Payday loans and ridiculous 400% APRs are glorified loan sharks, and should be legally capped.

I used to do a lot of corporate entertaining for my pre kids career. Most of the time I would have happily bought my own lunch if I didn’t have to put up with Dickheads.

If you are too poor to run a car, shopping at Aldi, Lidls or Farmfoods becomes a nightmare, and they dont offer food delivery, so you have to pay more and shop at a more expensive supermarket such as Tesco or Asda.

'Free food' could also relate to things like eg vicky pattison, reality TV star and influencer. Look through her Instagram, free Hampers from m&s, free takeaways, catering, meals put, desserts, cakes, grazing tables/boxes, a card which gives her and her partner unlimited free food from a bakers etc. And she's far from being the only one, lots of celebs and influencers get similar/more. I don't know if she's 'rich' but she's not poor and could afford her own food but companies like to give it to people who can promote them, so they get it for free.

Same with hair, nails, makeup, beauty treatments, jewellery, clothes, shoes, holidays etc. Eg Lucy who used to be on towie is currently on a free holiday, celebrities are sent clothes etc to wear for events. The more money you have, the less you need to use it!

@ThreeLocusts

I knew an economic historian once, a very posh ex-marxist who'd say in his expensive accent 'it's expensive to be poor.' So true, and so fixable.

Mind you, it's widespread. When I worked in Tanzania, you'd get poor villagers sometimes buy one pack of tea leaves or a few packets of cigarettes and then repackage them, selling the cigarettes one by one and the tea in two-soupspoon portions rapped in newspaper.

These small portions were so cheap that even ppl who never (or at least not currently) stretched to a whole bag of tea leaves could afford them. But relative to the amount bought, they were much more expensive. So the poor overcharged the poor to get by.

So the tea sellers provided a service to get basics to the very poor, but somehow shouldn't be compensated themselves for going to all that effort?

While I don't agree with extortionate rates of interest, how else would we have people going to the bother of providing goods and services if it didn't benefit them as well in some way? If landlords didn't charge more than their mortgage payments, who would you expect to pay when the boiler needs replacing or the roof needed fixing?

I went into my bank when I was a newly qualified teacher and struggling a bit financially. I asked for an overdraft and they said they wouldn’t give me one as my salary wasn’t high enough. So I kept struggling. It was a lesson of sorts though as it opened my eyes as to who and what is and isn’t valued in this society. I quit classroom teaching a year later, and now do a job with a similar level of responsibility but several times the salary. Being poor is no fun and IMO all the talk about respect for certain poorly-average paid professions is just that - talk. It certainly isn’t reflected in the society we have collectively built.

Many well paying jobs come with free or subsidised work canteens, free business lunches, expense accounts etc.
I've had a lot of well paid jobs and never had a free lunch - even on expenses we only got "free" food if travelling for business.
I do sympathise with OP - it's so true it costs extra to be poor.

Ask when Tom Hanks, Keanu Reeves, David Beckham etc last paid for a restaurant.
I bet they get free shit everywhere they go.
Me?
I haven't got my heating on yet because I cant afford it.

Can see your point but it's not the banks job to budget your money...

*anyone else's job, not the bank

I agree it's more expensive to be poor. I remember being outraged at how expensive it was to pay for car insurance monthly and yet we just couldn't afford it all in one go.

Plus not able to buy stuff in bulk was another way in which it was much harder if you're just scraping by.

I agree. I could afford to pay for my car servicing for 3 years upfront, for which I got a good discount.

The Scouts one has shocked me most of all. We're involved with the leadership of a similar organisation and we always allow parents to spread their subs payments in they need to. Some of the very poorest just make a nominal contribution and we've told them that's fine.

The subs also include provided uniform, so that the same items can be used again and again and passed down to the younger ones, rather than expecting every family to buy it for themselves upfront and then have to keep doing the same again each time their child outgrows it.

We all know that banks are huge capitalist institutions, but that really has astonished me, hearing that a children's community organisation cashes in by charging interest to the poorer parents.

The one I hate is people on low wages having to pay for DBS checks. Also public transport is so expensive, and it's usually people who can't afford to buy a car who end up using it