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There's no room for cuts to the social safety net

by Derek Mitchell, CAS Chief Executive.

This article was first published in the Herald on 7 November 2022.

The Bank of England’s decision last week to hike interest rates to their highest level in decades will have left hundreds of thousands of homeowners across the UK panicking about the cost of their mortgage payments.

The issue of interest rates has soared to the top of the political and media agenda in the aftermath of the September mini budget. However this is an underlying issue that has been supercharged by recent events, not caused by them.

We have seen a 287% increase in demand for online advice from people struggling to pay their mortgage over the past year.

That was in September but even over the summer we were seeing the rising demand. From June 2021 to June 2022 views of our webpage ‘Schemes that can help you pay your mortgage’ increased by 53%. Meanwhile the advice page ‘Selling your home to pay your mortgage debts’ increased by 81%.

In addition to that, face-to-face CAB advice on mortgage arrears was up 10% from June to July this year, and up 24% from July 2021 to July 2022.

Further research has also found that over 200,000 people missed a rent or mortgage payment last year because they’d run out of money before the end of the month.

Let me underline that this was last year. Mortgage concerns may be dominating the political agenda now but it has been a problem for much longer. We’ve been warning about it for in the pages of this newspaper for some time.

Many of you reading this perhaps won’t associate a Citizens Advice Bureau with helping homeowners with mortgage difficulties, thinking we are just for people who are really struggling to put food on the table or turn the radiators on.

The reality is different. We are for everyone and don’t care about someone’s background or circumstances: we don’t judge, we just help. Everyone should seek our free, confidential advice if they are worried about their financial situation or check our online resources like   

At this point, being a homeowner is no more a protection from being financially insecure as having a job. The underlying problem remains the same regardless if someone is paying a mortgage or rent to a private or social landlord – a cost of living crisis that is not so much squeezing household budgets as crushing them.

In just over a week the Chancellor will deliver his Autumn Statement, with gloomy predictions of the UK going back to the austerity economics of the 2010s. It’s not clear where further cuts to public spending can be made when people are already struggling so badly.

Across Scotland, CAB advisers are seeing people in increasingly desperate situations making impossible spending choices. As costs continue to soar, people are faced with flat or falling incomes. In next week’s statement we have to see a commitment to benefits being uprated by at least the cost of living. In an ideal world the triple-lock on pensions would be extended to all social security payments.

With a recession looming and the possibility of significant job losses, this would be a disastrous time to underfund the safety net. People of all ages, tenures and backgrounds could find themselves relying on it very soon.