New lottery-funded schemes aimed at helping people on low incomes in the south-west of England avoid falling into the debt trap have been backed by a …
New lottery-funded schemes aimed at helping people on low incomes in the south-west of England avoid falling into the debt trap have been backed by a financial expert.
Creator of the MoneySavingExpert website Martin Lewis is supporting the plans, which are aimed at making social housing tenants in Bristol and Plymouth more financially aware and confident in money management.
He said: "Disgracefully, it costs more to be poor. The poverty premium means, from household goods to energy bills, things are more expensive for those with little cash as they need to borrow to buy or don’t get the direct debit discounts others take for granted."
Mr Lewis noted that knowing how to handle money well will be more important than ever for recipients of the universal credit when the system comes into place, as it will require those claiming to take more control of their money management.
However, the help that will be provided to 150,000 people under the scheme should make this easier to do and "reduce the risk of desperation driving people into relying on costly payday loans or even loan sharks", Mr Lewis concluded.
People on low incomes who have had got into difficulties by using the services of payday lenders may benefit from seeking expert advice on how to tackle the situation.
The programmes taking place in the south-west are the Places for People Neighbourhoods scheme in Bristol, which has been awarded £999,832, while Citizens Advice received £864,210 towards its Wis£er Wonga.
Payday loans firms can present a significant risk to borrowers through their very high rates and large roll-over penalties for those who cannot manage to fully pay back what they owe by the allotted date.
The problems of such loans appear to be causing British consumers increasing levels of difficulty.
Last month, the Money Advice Trust said its National Debt Line had taken 9,500 calls on the issue in the previous six months, a 116 per cent year-on-year increase.
Posted by Paul Thacker