Media Matters

Families face more debt worries as cost of living outstrips pay increases

News   •   Nov 12, 2010 13:32 GMT

Squeezes on the cost of living for UK families will reach their worst for many years this winter, warns Payplan.

 

The national free debt solutions provider says imminent hikes in fuel and food prices, the recent Spending Review cuts and January’s VAT rise, equal a miserable time ahead for many families, and for some, it could tip them into debt.

 

“This is a particularly difficult time for the many families trying to keep up with rising costs whilst receiving no pay increase themselves either this year or last,” explains Payplan MD John Fairhurst.

 

“Without historically low interest rates keeping the cost of mortgages down debt problems would be even more widespread.”

 

The Government’s Spending Review cuts will lead to job losses, overtime bans and shorter working weeks for the public sector. Private sector staff won’t escape either as many private employers are reliant on local government or other public sector organisations.

 

Prices of gas are set to rise by nearly 10% after the UK’s second largest provider Scottish & Southern Energy announced it is putting up gas tariffs from December 1st. This represents a ‘body blow’ for consumers according to uSwitch which predicts the other main providers will follow suit during the heaviest winter months.

 

Families are already feeling the squeeze, says Payplan, with prices on diesel and unleaded fuel increasing recently and wholesale rises recorded in wheat and corn prices, leading to more expensive bread and breakfast cereals on supermarket shelves.

 

For low income families, the increasing cost of living in the lead up to Christmas is going to spell more debt problems, according to Payplan. The free debt advisor urges anyone who thinks they are likely to face money worries, to act now.

 

“It’s the lead up to Christmas,” adds John Fairhurst. “If we are not careful we are going to see a massive increase in credit card debt and people getting behind on utility bills and then mortgage repayments.

 

“It’s a potential recipe for disaster for many families – our advice is to speak to someone now – explain your situation, what lies ahead for you and your family and what your main worries are. In doing so, it is extremely likely there will be actions you can take now which will ease the situation going forward and mean you can try to enjoy the weeks up to and after Christmas, rather than dreading them.”

 

If you think speaking or emailing someone would help, try one of the free and impartial debt management advice organisations such as: Payplan: http://www.payplan.com - 0800 280 2816; the Citizens Advice Bureau: http://www.citizensadvice.org.uk/getadvice.htm - to find your local CAB branch; or the National Debtline: http://www.nationaldebtline.co.uk/ - 0808 808 4000.

Note to editors

More details on the rising fuel bills are available via uSwitch.com and its energy expert, Ann Robinson’s blog: http://blog.uswitch.com/2010/10/29/scottish-and-southern-energy-announces-price-rise/

Payplan was established in 1993 and is one of the UK’s leading providers of free debt solutions. Its award-winning service helps over 100,000 people in financial difficulties every year.