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40% have 'no option' but to borrow money

22 Dec 2010

Citizens Advice Scotland (CAS) have responded to the news that nearly 40% of people across the UK run out of money two thirds of the way through the typical month. The figures come from R3, the Insolvency Trade Body in their ‘quarterly tracking research’ report today.

Responding, CAS Chief Executive Lucy McTernan said,

“Sadly, these figures don’t surprise us. There is no doubt that many people on low incomes are struggling to get by every month. CAB advisers are seeing growing numbers of such people - many of whom are having to regularly make decisions between whether to heat their homes or put food on the table.

“Falling short before pay-day leaves people with no option but to borrow money to fill the gap. They simply have no other choice. Many then get into a spiral of debt which quickly becomes unmanageable. There are so many pitfalls – credit card and loan companies often charge massive rates of interest, banks can be extremely unsympathetic towards their customers with high overdraft charges, and only this week we have seen evidence from the Office of Fair Trading that some ‘payday loan’ companies are breaking the rules which say how much money they can re-claim from people’s bank accounts in re-payment for a loan.

“Our message to people who are struggling in this way is to get advice early, and to ‘shop around’ for the best credit options available to them, rather than just opting for the ones which seem most attractive. We would also like to see more government support for low-cost loan organisations, like credit unions.”

For interviews etc. please contact Tony Hutson on 07976 592118.

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