Avoiding a Christmas debt hangover
Published by Riverside for Riverside in Housing and also in Communities
A loan shark victim
Riverside is warning cash-strapped tenants not to turn to illegal money lenders to fund Christmas.
In the wake of the government’s benefit cuts, the social landlord appointed a team of Money Advisors to help its tenants manage their finances. It also recruited a team of Tenant Community Stop Loan Sharks Advocates to enable potential loan shark victims to access help and support.
Laura Bostock, Riverside’s Project Manager for Financial Inclusion, said: “It has been an incredibly tough year with rising costs of living, redundancies, pay freezes and benefit cut backs. So people may be tempted to put the scrimping on hold and blow the budget to spoil the kids at Christmas.
“But the reality is that Christmas is only for one day and, while we all deserve a few treats, it is not worth months, years or even a lifetime of debt.”
More than one in 10 Brits who took on debts to fund last Christmas are still paying off their loans as this Christmas approaches, according to research by the *Money Advice Service.
Nearly half (49%) of those surveyed took out a loan or went into more debt to get through the festive season last year and 13% are still paying the money off.
As finances continue to be stretched to breaking point, two-fifths of people (41%) think this Christmas will be harder to afford than last year.
A survey commissioned by Mothers’Unionrevealed that 72% of parents have bought their children a gift that was on their Christmas list which they really couldn’t afford. An identical number (72%) have worried about receiving their bank and credit card statements in January. In addition, 46% of parents have taken out a loan, or got themselves into financial difficulty to give the family a good Christmas.
Laura added: “Over half of social housing tenants don’t use mainstream credit, either because they don’t have access to a bank account, or have a bad credit rating. We work closely with credit unions, which offer community savings plans to prepare for Christmas expenses.
“If you haven’t already started saving but don’t want to get the New Year off to a bad financial start, there are still lots simple things you can do to make your money go further. Drawing up and sticking to a budget as well as organising a secret Santa instead of buying presents for everyone can really make a difference.
“However, if you do resort to lending, make sure it’s a low interest loan with manageable repayment plans. We recommend low cost lenders such as Moneyline, as well as Community Development Finance Institutions, which also offer affordable loans.”
To report a loan shark:
Call the 24/7 confidential hotline 0300 555 2222
Text ‘loan shark + your message’ to 60003