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.

It is easy to make money when you already have it - look at Richard Branson
We have got businesses off the ground while working in full time jobs to be able to pay the mortgage and eat and we have done it with financial backing that meant we could dedicate all our time to the business - guess which was more successful?
If you have money you can take risks and invest to make more. If you are broke it’s incredibly hard to dig yourself out of it

If it's your first time I would advise calling the bank and saying that. I've done it before and they refunded me. Also did it with my credit card as I kept using it (Apple Watch)and got no warning I had gone over and they gave me £25 as well.

@Skyll

We rented last year and had standard pay in arrears utilities, you don't have to have a prepayment meter just because you rent

OP- I would definitely speak to your Group Scout Leader. I am a cub leader and one of the other leaders suggested something similar recently. She is a lovely, kind woman but has never experienced any kind of financial hardship. We usually ask for payment each term but she suggested offering a discount to anyone who paid for a full year- her rationale was that this would make it easier for us (less time dealing with payments/chasing payments etc). It just hadn't occurred to her that perhaps some people really couldn't afford £100 upfront, or that the 'discount' would actually be an extra charge for being too poor to pay upfront.

As well as the free lunches/bulk buying etc I've noticed that costs of entertaining etc can be much higher when you have less money. I remember overhearing some of the rather well off school mums discussing what a waste of money it was when other, poorer, friends used to meet up in cafes/soft play or go out to pubs/restaurants in the evening. They really couldn't imagine why these people were doing that rather than taking it in turns to host at home. In my case, my home was only just big enough for 4 of us to eat/sit at the same time so 'host at home' was not an option.

My landlord (when I rented) didn’t let me change. They had the bill in their name on a prepayment meter and made it a condition of my tenancy that I didn’t change.

I was newly divorced and renting with small children - I didn’t want to be thrown out for rocking the boat.

I KNOW that legally they’re not supposed to do that but that’s easy to say when you’re not on a precarious private rent.

@MLMshouldbeillegal

the further up the ladder you go, the more free stuff you get. If you're really well off, you can even get free food!!

??? Waitrose having a secret deal where if you show them your bank statement you get a 25% discount?

Would love to know how this works.

Yes. Of course its true. You obviously don't have a big enough bank account!

You get a special card which looks exactly like a credit card and automatically pretends you've paid when its swiped so the poor check out staff are unaware of it happening.

This service isn't available in Asda or Aldi unfortunately though.

@theelephantinthegroup

OP- I would definitely speak to your Group Scout Leader. I am a cub leader and one of the other leaders suggested something similar recently. She is a lovely, kind woman but has never experienced any kind of financial hardship. We usually ask for payment each term but she suggested offering a discount to anyone who paid for a full year- her rationale was that this would make it easier for us (less time dealing with payments/chasing payments etc). It just hadn't occurred to her that perhaps some people really couldn't afford £100 upfront, or that the 'discount' would actually be an extra charge for being too poor to pay upfront.

As well as the free lunches/bulk buying etc I've noticed that costs of entertaining etc can be much higher when you have less money. I remember overhearing some of the rather well off school mums discussing what a waste of money it was when other, poorer, friends used to meet up in cafes/soft play or go out to pubs/restaurants in the evening. They really couldn't imagine why these people were doing that rather than taking it in turns to host at home. In my case, my home was only just big enough for 4 of us to eat/sit at the same time so 'host at home' was not an option.

From a business POV early payment discounts are part of cash-flow management. It’s more cost effective to be paid upfront, so part of that saving is passed on to those who do. It’s not a zero sum game where the extra paid by the poor is used to subsidié the rich. Rather each is paying the amount that they cost the business to provide the service. The likelihood of bad debts is an additional cost factored into monthly payments which is why it’s higher.

Not sure how this works with scouts - whether you determine the fees yourself. But if it’s costing you money/time chasing up payments and you have a lot of rich parents who just CBA , you running around doing the chasing is really just subsiding them and not helping the poor at all, as the latter pay the same regardless. Of course if people aren’t paying because they can’t it won’t really help.

When I was poor and single in a cheap student dorm life was definitely more expensive, but that’s just the way it was… it sucks but I can understand why

Rent + utilities being expensive is another matter entirely…

It is a pity there are no mortgage options available for people in this situation

Well, they tried that, didn’t they. That’s what led to the financial crash of 2009.

But there should be a better government backed scheme for providing mortgages to low income families to set off the lack of local authority /HA housing

I always remember a pregnant spice girl getting free prams from companies. Strick me as really sad.

@BoredZelda

No the atmosphere charge. Me and DH used to have to walk half an hour to get to the free cash machine or pay £1.85 to access our own money.

I know banks aren't a business but when you need a bank account you you can't get paid or you can't pay your bills. its not fair. its not fair at all. And I am 20x more privileged than I was 10 years ago.

Not sure what most of this means.

autocorrect went mad here. The cash machine charges. Paying £1.85 to get money out or walk half an hour to get to the free one. Conveniently near the massive houses not the dirty council estates.

And I said I know banks are a business but its not really fair as you NEED a bank account to get paid and you NEED a bank account to pay your bills
Nobody deals with cash these days. I see why but it can be tricky.

@hennybeans

It pays to live somewhere affluent too. I live in a small village and we have a Facebook mums group. People give away loads of good quality things for free or a nominal price. £10 for an outgrown bike, £20 for a John Lewis cabin bed, £5 bag of next baby clothes, free high chair, free GCSE revision guides, free good quality winter coats/ boots in the spring, July comes and everyone offers their outgrown school uniform, children's books, on and on.

I often think about the bigger town 5 minutes away where people don't have as much money and you'd never find anything good being offered for free. It is bizarre that the people who don't need the free things are the ones who have access to them.

No, but in the poorer town they probably have cheaper shops. I used to live in a cheap flat in an expensive part of town. It was fun, but I had to do all my shopping besides the supermarket elsewhere.

I did used to be really puzzled when magazines went on about the great things you can find in charity shops when all I could find were horrible old smelly things before I realised charity shops in rich areas get good things, but if you want a pound shop and a Savers...

@GattioAnyone

I always remember a pregnant spice girl getting free prams from companies. Strick me as really sad.

Lauren goodger who was in towie years ago got a free pram as well and has just posted an ad for something that monitors a baby's oxygen and stuff. If you look at lots of celebrities instagrams they have lots of ads (even the ones who don't mark it as an ad).

What do you mean, you were 'sent' into an unarranged overdraft?

You spent more than you had?

Why don't you arrange an overdraft then?

"But there should be a better government backed scheme for providing mortgages to low income families to set off the lack of local authority /HA housing"

There are 'help to buy' schemes, but the one in Wales ended up being used by people on good wages anyway just to get a bigger house. And why not build more council housing or councils buying private housing.
I suppose part rent part buy schemes are aimed at people who can't get a mortgage, but I've read bad things about them.

Prepayment meters are the one from my childhood.
I was incredulous to find we'd been paying a higher tarriff just to enable us to budget. So sad and unfair.

And, of course, the higher tariff is only one aspect of it. Unless they've changed it so you can top up online now (assuming you can afford an internet connection), you have to make the time (and take young children out with you) to go out to a shop to top up your key/card, maybe having to pay travel costs to get there, depending on where you live.

You have to pay the shop's commission in order to access the gas or electricity in your home. Ironically, there are many things where a better-off but time-poor person may choose to pay extra for an agent to deal with something on their behalf, but in this case, it's the poor who are forced to do this - not that it actually saves them any time or effort in this case.

2008/9 ish
before 2010 i think.
It was a school bus that went into the school grounds but not paid by school or anything. You paid normal fair.
I don't know why people think all of these problems died in the past

A little girl couldn't afford to get to school 10-12 years ago. in a massive city. Can't walk past the builders yard either so that'd put on 20 mins unless you were brave or a boy.

You beat me to it. I was going to say the same. There is most cost doing installments and risk. Thats why u pay more.

I could top up online but the min sum was higher - from memory it was min £15 online and £5 in person. @WeBuiltThisBuffetOnSausageRoll

What do you mean, you were 'sent' into an unarranged overdraft?

You spent more than you had?

Why don't you arrange an overdraft then?

That sounds judgey and quite a privileged viewpoint. It's easy to 'spend more than you have' if a company claims a DD a few days early or when your balance doesn't update in real time. Also, emergencies can crop up.

Banks are doing all they can to get people away from cash and companies penalise those paying in cash (sometimes charging an extra 50% or so for a basic phone SIM-only contract), but one benefit of cash is that you know exactly how much you have and what has been paid out at any one point.

DDs are much more convenient in modern life - as long as you have the luxury of a buffer zone and not needing to watch every penny.

Also, it's not always easy to 'just get an overdraft'. Apart from maybe for students, banks generally only want to grant them to those who find them handy but could probably manage without them - like the umbrella that Mark Twain famously spoke about. Unless you arrange one well in advance of when you need it, they will use your urgently needing it as a reason to refuse it and tell you that you can't afford it.

I got told today that while I can pay for breakdown cover on my boiler it now doesnt cover a service because its too old. But if it was newer it would. I cant afford a new one.

@LetterBug

2008/9 ish before 2010 i think. It was a school bus that went into the school grounds but not paid by school or anything. You paid normal fair. I don't know why people think all of these problems died in the past

A little girl couldn't afford to get to school 10-12 years ago. in a massive city. Can't walk past the builders yard either so that'd put on 20 mins unless you were brave or a boy.

You're much younger than me then. The situation of school buses must have got worse rather than better.

@mayblossominapril

Council tax. Where I live people buy holiday cottages, let them out, register them as businesses and then get small business rate exemption on them so don’t actually pay any council tax.😡 Live in the area however and a two bed terrace with no parking costs £1800 per year on band C and a three bed detached with parking, garage, garden , you know the standard estate type house is band E £2700 per year. Unaffordable if you are, like me, on a lowish income. It would be more than 10% of my annual income. I’m actually financially ok but that’s because I’m careful about the bills!

Is this in Wales? Because there should be a crackdown on that soon.

They also like to excuse it away with "well you are higher risk because you are poor and might not be able to pay off this £30. So we will make it worse by charging you extra on the thing we think you won't be able to pay off anyway"

It's very backwards.

I’m in rural North Yorkshire and I really Hope Wales makes the changes soon to benefit their local population and maybe other areas will follow.

Definitely ring them and tell them you're in poverty and ask them to refund it as a goodwill gesture. They should do it!