1 in 5 Scots can’t afford to live

A Scottishtrustdeed.co.uk survey reveals people in Scotland use credit to pay for daily living expenses more than almost anywhere else in the UK.

August 26, 2019 10:19
1 in 5 Scots can’t afford to live

. (photo credit: INGIMAGE)

A Scottishtrustdeed.co.uk survey reveals people in Scotland use credit to pay for daily living expenses more than almost anywhere else in the UK.


54% of Scots admit to using overdrafts or credit cards to pay for daily living expenses such as groceries and household bills. Almost 20% do it frequently. Across the UK, only London and the north east of England fare worse, with the best UK region (the West Midlands) almost 10% better off.


It’s a similar picture in terms of total debt. When the survey asked how many people carry £10,000 of debt or more from month to month, Scotland was again third highest in the UK with 35.29% (this time behind only London and the North West).


“Our survey shows that for many people, the concept of ‘just about managing’ remains a fantasy,” says Scottishtrustdeed.co.uk.’s David Baddeley. “Our survey shows debt is a worrying fact of life for more than half of Scots, and for many of those, it can be a crippling and insidious problem that can affect physical and mental health as well as finances.”


With such acute debt problems in Scotland, David is keen that more Scots recognise the symptoms of debt and seek help before the debt letters, creditor negotiations and calls from bailiffs begin.


Spotting a debt problem


“Debt can be something the creeps up on you,” explains David. “Many of us operate with a degree of manageable debt, but when something unexpected happens things can quickly spiral out of control.


“There are formal debt management schemes (such as a Scottish Trust Deed) to help those struggling with debt, and the sooner you tackle the problems, the better.”


David identifies the following as key signs of falling into (or being trapped in) unmanageable debt:


1.      Living on credit

The survey’s key finding is also the single biggest identifier of unmanageable debt. “Living on credit compounds problems,” says David, “because there’s always another fee to pay or interest charge to manage. Living on credit just isn’t sustainable, so if you are constantly in overdraft or using the credit card to buy groceries (and then paying off the minimum balance each month), it’s a classic sign that you need debt help.”


2.      ‘Robbing Peter to pay Paul’

Juggling credit cards and building up one while you pay down another is another classic symptom of needing debt help. Paying off one debt with another only creates a cycle of debt, which interest charges can quickly make unmanageable.


3.      Missed payments

Everyone has forgotten to pay their monthly credit card bill once in a while, and aside from a potential temporary hit to the credit rating, there should be no lasting damage. But when bills go unpaid because the money isn’t there to pay them, the penalty charges mount up as the bad credit rating tumbles. “If you’re missing credit repayments with any degree of regularity,” says David, “getting out of debt is unlikely to happen without help. It’s time to recognise that and take action now.”


4.      No savings

Savings can be a vital buffer at times of financial hardship, yet as the BBC reported last year, more than 20% of Scots have no savings at all, and 38% have less than £2,500 to fall back on.


“Being trapped in debt is doubly damaging because, as the fines and charges accrue, the chances of ever escaping the cycle and being able to save diminish,” David explains. “The right debt management scheme can give Scots the opportunity to draw a line in the sand, make a clear break from debt and, in time, start to save.”


5.      Not addressing problems

The ostrich approach to debt never works. Ignoring the debt letters and calls from creditors only stores up greater problems in a few weeks, and dealing with bailiffs and home repossession can be extremely harrowing.


“It’s important to recognise that the right debt solution is not to ignore the letter or hide behind the sofa when the sheriff officer calls. Talking to someone about your debt and working towards a debt arrangement scheme is the only real way to get creditors off your back and write off the money you owe.”


As the Scottishtrustdeed.co.uk survey shows, 1 in 5 Scots may benefit now from seeking debt management help. “The simple fact is, other than in exceptional circumstances, debt problems don’t go away on their own. It usually takes expert help to make a big difference, but once you seek debt help, the difference really can be transformative.”


For more information, talk to a Scottish Trust Deed debt solution advisor today.

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