Crosslight's Spring 2024 Newsletter
Our Spring Newsletter comes at the beginning of Debt Awareness Week, which is a great opportunity to raise awareness about our work and share important information about debt with a greater number of people. Debt Awareness Week started in 2014, and this year our focus is on sharing the struggles faced by those in debt, as well as the solutions and organisations that exist to help those in difficulty… an aim which is of course close to our heart.
So in this newsletter we want to shine a light on the different types of debt, how someone can better understand their finances, what can be done to prevent people getting into difficulty, and how to access support if you or someone you know are struggling with problem debt.
Did you know that…?
In December the Centre for Social Justice reported that 9.8 million people were over-indebted, meaning that nearly 10 million people in the UK were unable to pay domestic bills, meet credit card commitments, or found keeping up with bills and credit commitments difficult. This is an increase of over 2 million people since 2017, and represents 18% of all UK adults. Alongside this, household debt in the UK stood at 127% at the end of the 2nd quarter of 2023 (calculated by the ratio of debt to income).
These statistics really matter, because debt can compound other challenges and grip whole communities. According to recent polling, debt was viewed as the third most important cause of poverty in the UK. On average, during 2023, 64% of our clients reported having to miss payments on bills, with over a third cutting down or going without heating. Over two thirds of the clients that Crosslight support have a problem in at least one other area of their life, such as health, employment or housing, and a frightening 45% of our clients have had to cut down or go without food prior to seeking our help. Nationally, 20% of people in problem debt in Great Britain report ‘bad’ or ‘very bad’ health compared to seven per cent not in problem debt, and people with unmanageable debt are 24% more likely to experience poor mental health.
The Department for Levelling Up, Housing & Communities stated in June 2023 that outstanding council tax debt grew by a record 53% between 2020 and 2023 to £5.5bn. iNews reported in 2023 that since the pandemic, 4,500 debt orders a day have been issued by magistrate courts in England to recoup unpaid council tax, which involves bailiffs visiting people’s homes. The stress posed by debt is an extreme one, with 80% of our clients reporting that their mental health was being negatively impacted by their financial situation.
Bailiffs handle debt orders and they charge fees that are added to the debt, increasing how much you owe. Annie shares the impact Bailiffs had on her family’s life: '“It all started with me and the kids fleeing my abusive partner and having to restart my life in a different location. When my money situation got worse, I just didn’t pay anything and I just couldn’t cope with anything. It was the shame and the guilt really, which everyone has with money issues. It sucks the life out of you. It is all-consuming and takes you to a very dark place.”
“Me and the kids were hiding from bailiffs all the time. We all learned what to do if the door went - we lived with our blinds shut and the doors and windows locked. We didn’t answer the phone. It’s sad really, my youngest kid knew what to do at the age of 5. She knew at which points in the house the bailiffs wouldn’t be able to see us through.”
Bailiffs can make an already stressful situation worse, so it is important to seek help from a debt advice organisation as soon as possible if you are in debt.
Do you know what a priority debt is?
Dealing with any kind of debt is a scary and stressful prospect, but it is important to know that there are some debts that are of a greater priority than others. This is because you could face particularly serious problems if nothing is done about them.
Take a look at these 6 types of debt: can you pick out the 3 debts that are considered a ‘priority debt’? Priority debts can have severe consequences if they are not dealt with, including legal issues, further debt and a negative effect on your home or health.
One of our advisers wants people to know that “often non-priority creditors shout the loudest and bombard you with texts, letters, emails, phone calls… it’s not always those who shout loudest that should be dealt with first.”
When you start to receive debt advice, your adviser should always ask about all of your debts in order to pinpoint the priority debts that need to be tackled first. It may sounds odd, but there is a certain way and order in which to deal with debt and all of our advisers will explain this process (and we encourage those seeking support elsewhere to insist on receiving this information and guidance too).
One of our clients Simon shares: “my debts were a mixture of everything really. Rent, energy and council tax arrears, so a lot to work through on my own. The Crosslight team were very nice, kind and understanding. They were incredibly empathic to my situation. They asked me about my debts and explained how they could help and what plans could be put in place. The Crosslight team are great listeners, and it’s not just the technical and professional support, it’s much more than that. My debt adviser explains everything to me, I know what they’re doing and what they need from me. It’s all been about working as a team. Most of my debts have been sorted out now, which is great. I want people to know there is help out there if they are struggling. I’d love to go on telly and advertise Crosslight and the great work you do!”
How can you keep on top of things?
Crosslight runs a range of money education and financial capability courses which make managing our money simple, practical and, dare we say it, even fun!
The aim of our courses and workshops is to equip people with the skills they need to navigate their situation and feel empowered to deal with their finances going forward. This is as applicable for those who are struggling to meet ends meet, or who have previously received debt advice during a time of crisis, as it is for those who would like to take a fresh look at the way they manage their money, including their attitudes and habits.
Our Cost of Living Toolkit is a popular, short workshop which is run regularly online. It's aimed at anyone who wants to feel better informed about what's going on, what help is available, and get a taster of the tips and tools we go through on our full Money Course.
The Money Course itself takes place in person at our branches and online via Zoom, and is also available as a self-paced e-learning course. Covering everything from our relationship with money and our financial mental wellbeing to setting up a budget, balancing the books, keeping on top of your bills and using our bank accounts to manage our money day-to-day, the course is very practical and interactive. Anyone attending is also entitled to a place on our free Budget Coaching programme which provides one-to-one support with achieving their personal money goals.
We'd encourage everyone to engage with these free offerings, or to check out our paid-for options for organisations if applicable.
WHAT SHOULD YOU EXPECT FROM DEBT ADVICE?
There are a number of companies and organisations out there whose purpose is to support people in debt. However, it is important to know that not all of those offering to help you will do it for free or even make you aware of all the options open to you. Below, some of our advisers share what you should expect from a free and supportive debt advice appointment.
At your first appointment, advisers should get an understanding of your situation, listen to how you feel and what you are worried about in order to start building a picture of how they can help you and what the best path to deal with you debts is. You should not feel rushed.
Advisers are on your side. Clients should be able to make an informed decision about their debts and not just pushed into a particular solution (such as happens to many clients who are mis-sold IVAs). You should come away feeling that there is hope and options for dealing with your debts, not feeling that you will be fleeced by the adviser for more money you cannot afford.
Expect an outline of what options are potentially available to you and any immediate information that will help you deal with your situation in the short term
Don’t expect a quick fix! Depending on your situation it can take several appointments to resolve the issues.
Everyone is entitled to FREE debt advice. If you are asked to pay for a debt advice service, or told that your debt repayment option includes payments to the adviser’s company, then please seek support from a different organisation. If you don’t live in Crosslight’s catchment areas, you can find details of the organisations which can help you by visiting the debt advice locator on the MoneyHelper website.
How could you help?
If you are in a position to help people living in poverty and struggling with debt, you can support the work of Crosslight in various ways. We have highlighted some of these below. Click on the buttons to find out more and make sure to get in touch with our Fundraising & Engagement team if you have any questions, ideas or suggestions.
An afternoon with Kingston Chamber Orchestra
On Sunday 28th April, St James’s Church will open their doors for a concert by the Kingston Chamber Orchestra. This family-friendly event is destined to be a great one and we would love to see as many of you there as possible. Click on the button below to get your tickets!
Move4Change with our Hammersmith team
This wonderful event, which has graced the streets of Hammersmith and Chiswick for 9 years, is back in 2024. Our Hammersmith team would like you to put Saturday 14th September in your diary and sign up to join them to support those living in the Hammersmith and Fulham area.
Challenge Events and Team Crosslight
Would you like to tick something off your bucket list while helping people in poverty? If so, joining Team Crosslight and taking on a challenge event could be for you! We have hundreds of places in events around the work and there is something for everyone.
Other ways to support those struggling with debt
The cost of living crisis has impacted many, and we are so incredibly grateful to everyone who shows our clients support. Could you become a volunteer? Sign up to Payroll Giving with your employer? Or even leave a gift in your will? We would love to speak with you if you are interested.
Priority Debt answers: Rent, Council Tax and Gas bill are all priority debts. Credit Card, Payday Loan and Store Card are not.
Some of the statistics in this Newsletter were taken from the December 2023 Interim report from the Centre for Social Justice: Two Nations: the state of poverty in the UK, and the stated references from within this report as well as the iNews article by Steve Robson from June 2023: ‘It keeps you up at night’: more than three million taken to court unable to pay their council tax. We also share a number of our own Crosslight Advice statistics.