Living costs rising and debt

[Rayn22]

Had a chat with my friend today who is worried. With the cost of living and energy prices going up they are not going to be able to make their loan payment once bills, food and essentials have been paid.
Made me realise they won't be the only ones. She is going to get some advice but I think this will be the case for a lot of people.
People will have taken out loans, etc but there is going to be a lot of people who can't pay them back especially this Winter.
It's just another shit thing to happen. It's ok saying people shouldn't have taken them out but at the time they were affordable. A lot of people are going to struggle paying off debt they previously took out.
Just wondering how understanding debt companies are going to be!

I'm worried. I'm finding I'm now living in my overdraft for a significant part of the month and also relying on my credit card and this is not due to a lack of budgeting or frivolous spending. There are only so many hours I can work as a single parent with only the usual Mon-Fri 8-6 childcare. I'm studying at the same time so hoping my situation will improve later on next year when I gain my qualification.

I used to work as a debt adviser, I know how to budget and how to deal with debt. I'm finding I'm being forced to take out credit just to pay for the basics. My worry is how I'll pay for everything from now until I qualify.

There is some light at the end of the tunnel for me but what about everyone else? I'm halfway through my course, luckily. Not everyone can retrain or get a pay rise or promotion. All of these things can take time, we need help now.

I do not disagree with the sentiment of living within your means. It is rather shortsighted however to overlook the societal pressure to be seen to be successful. So having the bigger house, new car etc.., and the banks or loan companies facilitating this change in attitude.

I genuinely think people will be forced to give up their cars if they have payments to make on them. It’ll be a choice between paying rent/mortgage/energy bills or having a car.

Not just that, but the hospitality industry is going to suffer. It will be too expensive to open and heat/light buildings so pubs/restaurants will only open on Fridays and Saturdays. Leisure centres won’t be able to afford to open.

I think loan companies should be regulated on advertising as well. Every time I open any form of social media, all I see are short term loan companies with massive interest rates and slogans such as "CCJs, defaults accepted".

Que 10k comments below making enquiries. They're attempting to lure people in and their targeted audience judging by the interest rates being offered are people with poor credit rating... who are probably already up shit street and need to borrow Peter to pay Paul. I think it's wrong.

I understand that people need credit because don't we all sometimes, but I think there should be another responsible lending option, like banks could offer bad credit loans with the caveat that a % is deducted from salary or something similar.

Otherwise it becomes a vicious circle of high interest lending. My younger sister got herself in a situation where she borrowed £700 on a payday loan, didn't read the small print (19 yo) and the interest was stacked, she had a bill for nearly 3k!!! Luckily I managed to speak to the lender as after doing some research I found the FCA prohibits interest rates totalling the full amount of the loan, they tried arguing it was classed as a long term loan and the rule doesn't apply (it wasn't).

Managed to strike a deal but it involved me paying 1.5k outright to settle it and she pays me back £30 a month. Her affordability was fine for the £700 but not bloody 3k!! She learnt a big lesson.

But these companies are all over Facebook and instagram roping people with limited options into huge interest loans. It's a shit show.

''@oiltrader · 12/08/2022 08:49
No sympathy. people wanting instant gratification, taking out loans, spending it on crap for the house. debts need to be paid.''

And I have no sympathy for people who feel the need to post such judgemental, ignorant comments.

For all you know the loan could be to fund something essential like replace a broken boiler or get a car fixed if you live somewhere that does not have public transport. People with small businesses also take on loans for perfectly good reasons to develop their business. You might even have someone who needs an operation and can't wait any longer on the NHS ridiculously long waiting list because of the pain they are in.

To suggest anyone taking on a loan is frivolous is nonsense. Not to mention that most people will have mortgages.

What you should be complaining about are the real scroungers like Boris Johnson who have destroyed this country while getting a fat salary at the tax payer expense and getting all their donor friends to fund their home improvement...

no one forces anyone to try and keep up with the Jones's. When the tide goes out, we shall see who has no costume

While @oiltrader is coming across like an unsympathetic troll, there is a grain of truth to what they say.

we’ve been hearing for years now that there is a lot of consumer debt out there and that people have generally been using it for day to day living. Credit cards and buy now pay later for clothes, pcp for new cars. I think there are a lot of people with debt for genuine reasons but also a lot for “lifestyle” reasons who will both find it hard.

These days people just want 'stuff' I can't get my head around people with mobile phones worth over a grand.

I know someone who is really worried about the looming increases in energy bills but pays over £200 a month for iPhone and iPad contracts for her and her 10 year old daughter. She has over a year to go before the contract ends.