Cizens Advice Scotland (CAS) have warned that many Scots are facing ‘financial crisis’, as a new report shows that average households are £11 per week worse off than they were last summer.
The report, published today by Asda, says that the average UK household had £166 per week of discretionary income to spend in July, which is 6.4% lower than a year earlier.
Responding, CAS Chief Executive Lucy McTernan says,
“These are very significant figures. To lose £11 from your weekly budget is a blow to any household. But to those who were already on the poverty line and struggling to make ends meet, it can be quite devastating.
“Sadly the report comes as no surprise to us. Every CAB in Scotland will tell you that the most common problems people bring through their doors today are related to finances. Scots everywhere are finding it hard to cope with the rising cost of living, against the background of the recession.
“The reasons for the recession are in many ways complex. But for a family who is struggling, its very simple: prices are rising all the time, and their incomes are either frozen or falling. You don’t need to be an expert in economics to work out what that means. Many people don’t have enough money to pay the essential bills, like food, fuel and rent/mortgage. And the idea of spending on ‘luxuries’, or of putting some money away for the future, is just not an option.
“So, this ‘double whammy’ of rising prices and falling incomes is pushing huge numbers of people into financial crisis, and leading many of them into debt – which of course just makes their problems worse.
“Those who are worst affected tend to be those who were on the lowest incomes to begin with. If you can barely pay your bills from week to week and you suddenly lose your job, how do you pay your rent or mortgage at the end of the month? Many feel they have no option but to borrow. But with banks refusing to lend they turn in desperation to loan sharks and high-interest lenders, and so they get into a spiral of un-manageable debt. Its either that or lose your home. That’s the reality for many families.
“In these circumstances its extremely important that people do all they can to avoid debt. Support is available - the CAB gives expert financial advice to anyone who needs it, and our advice is always free, confidential and completely impartial. So if you are worried about your ability to pay your bills, don’t just get into debt. Come and see your local CAB and ask to speak to the Money Adviser.
“I know many people find it difficult to ask for help, particularly if you have never been in this situation so before. But there really is no shame in feeling under pressure at the moment – its happening to everyone. Our professional advisers are experts in this field, and their advice is completely confidential, They will not criticise you – they’ll just sit down with you and go through your finances in a calm, constructive way, advising you how to maximise your income, and helping you to plan and budget effectively. But its important to come as soon as possible – particularly if you are already in debt. Because one thing is for sure: the longer you delay the worse things will become.”
For interviews etc., please contact Tony Hutson on 07774 751655. NB This is the number of the CAS Press Office, for use by journalists only. If you are a member of the public looking for CAB advice please contact your local bureau.
Note: This press release is issued in response to the Asda Income Tracker Survey, which has been published today.