Category: Debt Advice

Cost of Living Crisis

Posted on by Craig Stocks
New polling figures show that 84% of people in debt attribute the rising cost of living, including groceries and utility bills, to the reason for their debt problems. Using this figure, CAS estimates that this equates to 657,323 people in Scotland who are now driven into debt due to the cost of living crisis.  

Cutting Back on Essentials

Are you struggling to cope with rising costs?

With the high cost of everyday essentials, we are feeling the detrimental effects across the country. Many people are cutting back on essentials such as heating and food to cope with these rising costs. In a 2023 Trust Deed Scotland® customer survey, we asked our customers how they were dealing with the cost of living crisis.¹ Many of responses said that they were having to cut back on a range of essentials as well as find the money to pay for essentials elsewhere such as friends, family and taking out additional credit. 78% of our customers told us that they cut back on socialising. 46% of our customers said that they cut back on heating. 44% of our customers told us that they cut back on buying food. 28% of our customers said that they borrowed money from family or friends. 11% of our customers told us that they took on additional credit.

Getting into Unaffordable Debt

Debt happens. After years of speaking to people in unaffordable debt, we know that debt is often out-with our control and that debt can happen to people from many walks of life. With many people now finding themselves in a position where essentials such as food and heating are unaffordable; relying on other methods to get by such as credit cards, personal loans and overdrafts. Trust Deed Scotland® customers reach out to us with many different debt concerns:¹
  • 79% of our customers said that they were most worried about credit card debt.
  • 60% of our customers said that they were mainly concerned about personal loans.
  • 30% of our customers said that overdraft fees were their biggest concern.
  • 18% of our customers said that were worried about council tax arrears.
  • 17% of our customers said that they were most concerned about payday loans.
  • 15% of our customers said that buy now, pay later fees were their biggest worry.
  • 14% of our customers said that were mainly concerned about gas and electric bills.
  • 36% of our customers said that they were most worried about other debt such as mortgage arrears, rent arrears and car finance.

Coping with the Cost of Living Crisis

If you are finding that rising costs are driving you into unaffordable debt, you are not alone. A YouGov active sampling poll asks their panel of users to compare their current financial situation to what they think their financial situation will be in 12 months’ time. Looking at the results for Scotland from January 2023 – March 2024, averages are;²
  • 34% said that they imagine their financial situation to be worse.
  • 35% said that they estimate no change to their financial situation.
  • 20% said that they think their financial situation will be better.
  • 11% said that they didn’t know.

Debt Help is Available

If you are living with unaffordable debt, you are not alone. We provide debt advice for people across Scotland; helping our customers to choose a debt solution that can get their finances back on track. Here at Trust Deed Scotland®, we provide specialist advice on formal debt solutions including a Trust Deed, the Debt Arrangement Scheme, and the Minimal Asset Process. These solutions allow you to reduce your current payments such as credit cards and loans, and other types of debt that you realistically can’t afford to repay. Your reduced payments will become a single monthly payment based on what you can afford, paid over a fixed timeframe. This helps our customers to regain some financial stability and afford the cost of their essentials again. We are rated No.1 in Scotland for debt advice, with over [reviews] five star reviews on TrustPilot. This year, we have already heard from people across Scotland who have felt the detrimental impact of the cost of living crisis. Read some of these reviews from 2024 below:   “After trying to manage and cope with rising living costs over the past 13 years, and more and more debts increasing day by day in recent times, contacting Trust Deed Scotland® was our final option…” “… We have just signed our papers today but the relief and weight that has been lifted has really given me a sense of hope for the next 4 years, knowing that the stress and upset from the challenge of managing mounting debt in recent times will be behind us…” – Mark   “I have been extremely stressed over money problems, with the cost of living and the pandemic, I was hit hard just like many others. I decided enough was enough and reached out to Trust Deed Scotland®, my adviser Matthew has been so kind and reassuring, an asset to the team and has helped immensely. Don’t suffer in silence, if you are struggling give them a call.” – Simone.   “…It’s been an easy process where you regain your financial independence. Some would argue 4 years is a long time but the stress relief alone was worth it and now, coming out the other side, I can say it’s flown by. My experience was very positive from start to finish and I can’t thank the whole team enough. I would strongly advise anyone facing financial hardship due to cost of living etc to take back control of your life…” – Mark.   “I’ve recently used Trust Deed Scotland® to help manage my debt, through the cost of living and always something breaking down be it the boiler or the car, it seemed more and more things were having to go on credit cards, and although I’ve managed to keep on top of the payments there would be literally nothing left to live on. Would cause anxiety, sleepless nights and wondering how I was going to get out of the never ending loop I was going around…” “…the weight that has been taken off my shoulders is amazing, now I pay 1 affordable payment a month with more than enough left that I can actually start to save a little!” – Samantha.   To find out more about the available formal debt solutions that can help you to manage the cost of living, get in touch with our team of experienced debt advisers today. For confidential, non-judgemental and friendly advice, contact us via our WhatsApp Debt Advice service, or to quickly check the debt solutions you may be eligible for, use our Trust Deed Wizard® tool. Alternatively, call us on 0141 221 0999.   ¹Survey results taken from November-December 2023 with 2,246 Trust Deed Scotland® customer responses. ²Figures taken on 18/03/24

Stress Awareness Month

Posted on by Craig Stocks

Dealing with Debt Stress

After helping [volume] people since 2009, we have spoken to many people dealing with debt stress. We know that debt has been on their minds 24/7; impacted their everyday decision making; forced them to go without essentials and in many cases led to social isolation. Debt can be a heavy burden, causing stress for people from all walks of life. With the constant worry as creditors chase after what they’re owed; as essentials become more and more difficult to pay for; as credit card debts and secured loans pile up; and as daily expenditure adds up, debt can lead people to feel overwhelmed.  

Signs of Debt Stress

Feeling sad, sick, or overwhelmed when thinking of money can be a sign that you are struggling with debt stress. You may also struggle to sleep or eat properly; you may be withdrawn from family, friends and loved ones; or you may find it difficult to concentrate on work and family life. No matter who you are; stress and debt affect everyone indiscriminately. Worrying about debt not only harms your quality of life, but also the quality of life of those around you. Stressing about debt can:
  • Keep you from enjoying important moments in your life.
  • Distract you from enjoying time with the people who matter most to you.
  • Cause sleepless or restless nights.
  • Impact your physical health such as eating and exercise habits.
  • Cause negative strain on your relationships.
  • Lead to behavioural issues.
A staggering 93% of Trust Deed Scotland® customers said that debt caused them sleepless nights in a 2023 survey. You may have learned to worry about money from parents, use worry to stay on top of your finances, or simply worry because you don’t know where all your money goes. Many people across the country experience money worries. If you are stressed about your finances, you are not alone.  

Debt and Mental Health

With mental wellbeing in Scotland at a record low (as reported in The Scottish Health Survey 2022 – published in December 2023), it is more important than ever to discuss the causes for stress. Being in debt can be stressful and this can negatively impact on your overall health; including mental health and physical health. In our 2023 survey, almost 91% of Trust Deed Scotland® customers told us that debt had an impact on their mental health before entering a debt solution, with many specifically affected by stress and anxiety.* Research reported by National Debtline shows that 50% of adults who are struggling with debt also have a mental health issue. No matter what mental health problem a person is dealing with, it can be extremely difficult to balance the management of money and debt with the management of mental health.  

Debt Stress Impacts Over 660,000 People in Scotland

Citizens Advice Scotland estimate that over 650,000 people in Scotland are directly driven into debt due to the cost of living crisis. This comes from new figures reported by YouGov showing that 84% of people in debt say that the rising cost of living is the reason for their debt problems. Struggling with debt and a mental health issue are often interlinked; with one negatively impacting the other in a cycle that can feel never-ending. Citizens Advice Scotland have launched the “Stressed about Debt?” campaign in response; aiming to encourage people to reach out for debt advice if they are struggling.  

Managing Debt Stress

For stress management techniques, read our advice on managing debt stress. The first step to improving your stress levels, could be interlinked with your money troubles; by improving your finances, your health can follow. Entering a formal debt solution can give you breathing room with unaffordable expenses and in turn alleviate debt stress. In a recent survey, 89% of Trust Deed Scotland® customers told us that their mental health improved after they entered a debt solution.* See below for TrustPilot reviews from our customers that experienced stress from their debt prior to starting a debt solution. Get in touch with us to discuss the available debt solutions for you, and ease your debt stress. Contact us via our WhatsApp debt advice service, call us on 0141 221 0999, or quickly find out if you qualify for a formal debt solution through our Trust Deed Wizard® tool. “I was struggling with debt and didn’t know where to turn. I made the decision to contact Harper McDermott & Trust Deed Scotland. This was the best decision I ever made. I am now debt and stress free…” – Colin “We have just signed of our papers today but the relief and weight that has been lifted has really given me a sense of hope for the next 4 years, knowing that the stress and upset from the challenge of managing mounting debt in recent times will be behind us…” – Sharon “…I was pretty anxious and unsure that I’d b able to get help. Stress was starting to get the better of me. Thanks to David, the stress has now been lifted. He was very thorough, patient, understanding and happy to help. Anytime I messaged or emailed he got back to me quickly. Went through all my options with me in great detail to make sure I made the right decision…” – Stevie “I have been dealing with multiple payments and debts for many years, causing stress! Decided to look into a Trust Deed as a way of consolidating. Have dealt with Barry who has been fantastic. Friendly, extremely helpful and reassuring! He has put my mind at ease that going forward my worries about my debts will be much less.” – Aisling “At the lowest point before I started I was paying out almost 90% of my income on paying loans, mortgage, car and finance. Trust Deed Scotland® helped me re-arrange my debts in to one affordable monthly payment that took the stress out every day life worrying about debt collectors and Bailiffs…” – Andy   *Survey results taken from November-December 2023 with 2,246 Trust Deed Scotland® customer responses.

How to Write Off Debt

Posted on by Craig Stocks
Many Trust Deed Scotland® customers who come to us looking for debt advice; often asking for more information on whether they can write off their debts.

Can You Write Off Debt without entering into a debt solution?

In some rare cases, you may find that creditors (the people you owe money to) may be willing to write off some or all of your debt if you can prove that is unaffordable for you and if you also have a terminal illness and your life expectancy is limited for example. Alternatively, it’s a genuine possibility to write off debt after completing select debt solutions. In this article, we will explain the available debt solutions that can allow you to write off debt when you have unaffordable payments.  

Debt Solutions That Write Off Debt in Scotland

The following are debt solutions available to Scottish residents. See below for how to write off debt in the UK.

Protected Trust Deed (PTD)

A Trust Deed is a legally binding agreement where, once completed, any remaining, qualifying and unsecured debts will be written off. A Trust Deed is completed after a typical repayment period of 4 years, with affordable monthly payments being paid towards your debt during this period. Trust Deeds can only be arranged and administered by a licensed Insolvency Practitioner (IP), such as Trust Deed Scotland®, who will take on the role of ‘Trustee’.  

Sequestration / Scottish Bankruptcy

Sequestration is the Scottish legal term for bankruptcy. Sequestration can be an appropriate solution for you if you are struggling with unaffordable debts. Sequestration is also used by creditors who take legal action against individuals for repayment of debts. If creditors have already commenced legal action against you, or you would like to get ahead of your debts now, please don’t hesitate to get debt advice. If you have a low income and have little or no assets, the type of Sequestration you would qualify for is known as the Minimal Asset Process route to Sequestration…

Minimal Assets Process (MAP) Bankruptcy

Minimal Assets Process – or MAP – is a route into Sequestration, for Scottish residents with a low income and few assets. With MAPs, you can write off your unsecured debts after 6 months; provided you have no disposable income, or your income is solely derived from social security benefits.  

Debt Solutions That Write Off Debt in the UK

The following are debt solutions available to residents in England, Wales and Northern Ireland. Once chosen or completed these debt solutions, you will be able to write off remaining debt.

Bankruptcy

Write off unsecured debts if you can show it is unaffordable for you. You may have to sell assets such as a house or car.

Debt Relief Order (DRO)

UK residents must have a few assets to choose this debt solution, and usually opt for a Debt Relief Order when debt levels are relatively low.

Individual Voluntary Arrangement (IVA)

This is a formal agreement for those in England, Wales and Ireland to make affordable monthly payments to your debts. Often, lasting over 5 or 6 years.  

Asking Your Creditors to Write Off Debt

Our customers come to us with unaffordable debt; finding themselves in financial difficulties for a range of reasons. Some reasons can be; If you’re struggling to pay off debts due to challenging circumstances, creditors may agree to write off your debts if:
  • You provide proof of inability to pay
  • You have no assets to sell
  • It clearly isn’t worthwhile for them to keep chasing the debt
However, this is rare, as creditors will only do this for the most serious cases. Before writing off debts, creditors may agree to stop contact for a period of time or agree to help if you have a mental health issue. For help with debts from creditors regarding your mental health, provide proof with a Debt and Mental Health Evidence Form (DMHEF). This must be stamped by a professional such as your GP to be considered complete.  

How Writing Off Debt Affects Your Credit Rating

Entering into any formal debt solution mentioned above will harm your credit score. However, if you are continually missing payments already, your credit score is currently affected. There are many misconceptions about credit scores, so make sure you have all the facts before making a decision. Most importantly, once you have written off debt, you can work on rebuilding your credit score. A bad credit score won’t remain if you take the steps to repair it and follow our tips on improving your credit score. With your debts written off, you will no longer miss payments that are harming your credit currently.  

Tailored Debt Advice

“Can I write off my debt?” – our team of experienced debt advisers are happy to answer. After a discussion about your circumstances, Trust Deed Scotland® debt advisers can provide information of all the solutions available to you. We are one of Scotland’s largest debt solutions providers, specialising in debt solutions such as Protected Trust Deeds, which allow you to write off debt once completed. If you have debts mounting up and are unsure what to do, please reach out. We are here to help. Our team of experienced debt advisers ensure you have all the information to make the right decision for your circumstances and needs. Contact us through WhatsApp Service, or by calling 0141 221 0999. Alternatively, try the Trust Deed Wizard® tool to quickly check your eligibility online.

Debt Awareness Week 2023

Posted on by Craig Stocks
It’s Debt Awareness Week and, this year, it’s highlighting that debt can happen to anyone. Debt Awareness Week is an annual event that aims to bring awareness to the struggles faced by those in debt and highlight the help available. Thousands of people across Scotland are seeking debt help for the first time amid the cost-of-living crisis. Debt Awareness Week is taking place between the 20th and 26th March and is led by debt charity StepChange. The week pushes debt advice services to work together to help people who are living with unaffordable debt. Citizens Advice Scotland have just revealed that over 780,000 people in Scotland expect to increase their credit card use during the cost-of-living crisis. Seeking debt advice for the first time can be daunting, but here at Trust Deed Scotland® we want people to feel empowered and confident that they are doing the right thing when seeking help.  

Stigma

Even in 2023, there remains a stigma and embarrassment surrounding debt. Citizens Advice Scotland have revealed that more than three quarters of Scottish adults in debt have said that their mental health had been negatively impacted as a result. We want people to understand that they are not alone in their financial worries and that there is help available for them. 32% of our customers said in a 2022 survey that the fear of being judged, ashamed or embarrassed about their debt stopped them from doing something about it sooner than they did. Problem debt can happen to anyone and open conversations about personal debts can empower others in the same position to then ask for help themselves. At Trust Deed Scotland®, since 2009, we have helped over 25,000 people in Scotland with their unaffordable debt and given them a chance to enjoy a brighter future.  

Trust Us

We are rated No.1 in Scotland for debt advice, with over [reviews] five star reviews on Trustpilot. “I honestly could not have asked for anyone more patient, helpful, empathetic and understanding than Val. I was in a lot of distress, and it feels like she waved a magic wand and made it all better! I’m not good when it comes to all the rules and regulations, but she spent time talking me through everything, so I actually understood.” – Lesley   “I got myself into a mess which I couldn’t see a way out of. Debts larger than my yearly income with nearly a dozen cards. I was missing payments and had started getting phone calls from the Credit Card companies. I have a mortgage on my flat and a car that I need for work and was worried about losing them so put off finding help and tried to struggle on for months. I sent a text to Trust Deed Scotland, and it was a huge weight off my shoulders after just the first phone call. A trust deed wasn’t right for me, but I had other options which I would have never known about if I hadn’t spoken to Jacqui. I’ll now have one single monthly payment which is affordable to me and my home and car are protected. Like a lot of people my only regret is not seeking help and advice sooner.” – Mark   “After so many hesitations I decided to bite the bullet and just seek help to resolve my debts and the process couldn’t have been easier and that is all thanks to the amazing help of Vicky. She took the time to understand my issues, queries and worked with me to set up an affordable payment plan that helps myself be debt free in 4 years.” – Ross   “Trust Deed Scotland have been absolutely amazing, they have helped me get my life back on track. I wish I had done this years ago. Peter was so helpful and understanding and never once judged me. He told me numerous times that I was doing excellent, which made me feel so at ease. He went through all the options I had, explaining everything. Never once did he pressurise me into agreeing to something I wasn’t happy about.” – Leigh  

How to Seek Help

There are many places to go for confidential and impartial debt advice. Here at Trust Deed Scotland®, our experienced debt advice team offer tailored debt advice and specialise in solutions that reduce your monthly debt repayments to an affordable amount, allowing you to have a clear plan to get your finances back on track. Contacting us is easy, give us a call on 0141 221 0999, email us at enquiries@https://www.trustdeedscotland.net or follow our Wizard tool to see if we can help.

Rent and Eviction Freeze Update Scotland

Posted on by Craig Stocks
Even though the rent and eviction freeze came to an end on the 1st April 2023, there are still measures in place to protect tenants from astronomical increases to their monthly bills.  

Private Rent Cap

For those privately renting, there is a cap on increases made between now and the end of September. Landlords can only increase rent by 3%. They can request a rise of up to 6%, but must be able to prove that their expenses on the property have risen. This will only happen in limited circumstances. If Rent Service Scotland have approved a higher increase in rent, tenants can appeal the decision by applying to the First-tier Tribunal for Scotland. Landlords must give at least three month’s notice on any rent increases. However, prices can rise past the 3% threshold only if tenants agree to it. There have been cases of tenants agreeing to a large pay rise under the agreement that they will not face eviction or a much larger rent increase once the law is relaxed. The rent cap attempts to protect low-income households during the cost-of-living crisis and ensures that they are paying fair and appropriate prices for their homes. For those in student accommodation, landlords can increase rent above the rent cap, but they must follow the process as set out in the contract.  

Rent Market in Scotland

In the renter’s market, competition is unmistakably fierce at the moment. The average time between advertisement and signing of the tenancy agreement has fallen from 35 days to 16 days in the last two years. For one and two-bedroom flats, 40% of tenancy agreements are signed within the week.  

Rent Arrears in Scotland

For those that fall into rent arrears, some may be eligible to apply for the Tenant Grant Fund if they are facing eviction. The Tenant Grant Fund is paid directly to the landlord to help the tenant cover any rent arrears, and does not need to be paid back by the tenant. To apply for the Tenant Grant Fund, speak to your to your local council.  

Eviction Freeze

The Eviction Freeze has been extended until the 30th September and protects private tenants from eviction amid the cost-of-living crisis. The landlord can still serve tenants with an eviction notice or get an eviction order from a court or tribunal. However, they cannot enforce the eviction until the end of September unless the ban does not apply to you. If the ban does not apply to you, you may still be evicted. The ban does not apply to you if you: –
  • Are being evicted due to anti-social or criminal activity.
  • Have six months of rent arrears for private tenants.
  • Have £2,250 worth of rent arrears and renting from the council or housing association.
  • Are living in a property that needs to be demolished or renovated.
  If being evicted for falling behind in rent, the landlord must attempt to help you before they are able to evict you. They must be able to prove this at either a tribunal or in court. For unlawful eviction, tenants may potentially be awarded damages up to the value of 36 month’s rent. A large spike in evictions is expected once the ban is lifted towards the end of the year.  

Debts

For those struggling with debt during this time, help is available. It may be worth opening an account with another bank which would allow you to safely pay your rent from your new account and avoid money from being withdrawn to cover non-priority debts such as credit cards. Some bills that you receive are regarded as priority debts because the consequences of not paying those priority debts are greater than the consequences of not paying your other non-priority debts such as credit cards. For example, if you don’t pay your mortgage, your home could be repossessed. If you don’t pay your rent, you could be evicted. Therefore, it is always advisable to regard your rent as a priority bill.

Formal Debt Solutions

A formal debt solution may be the best option for those with unsecured debts, such as credit cards, alongside rent arrears. We offer tailored debt advice on solutions that are designed to consolidate all your unsecured debts into one, affordable monthly payment. Solutions such as a Trust Deed or the Debt Arrangement Scheme can free you from the burden of debt and allow you to regain control of your finances. Follow our Trust Deed Scotland® Wizard Tool to see if you are eligible.

Mental Health Awareness Week 2023

Posted on by Craig Stocks
It’s Mental Health Awareness Week and this year’s theme is anxiety. Across Scotland, more than one million adults are experiencing levels of anxiety that is stopping them from living their lives. More than a third of adults feel anxious about their financial situation with the mounting pressure of the cost of living crisis.   The purpose of Mental Health Awareness Week is to encourage everyone to think about mental health and tackle the stigma that surrounds it. The Mental Health Foundation aims to create an understanding society that prevents mental health problems from developing in the first place and encourages everyone to thrive. Alexa Knight, Director of England at the Mental Health Foundation, said: “We’ve chosen anxiety as the Mental Health Awareness Week theme this year to kickstart a nationwide conversation, encouraging people to share their own experiences and any helpful ideas on how they manage their anxiety. “We all feel anxious from time to time. “Anxiety is a natural response to the uncertain world around us but it’s important that we recognise and respond when we feel anxious so that our anxiety doesn’t become overwhelming.” The Mental Health Foundation are encouraging people to share tips about how they cope with their anxiety under the hashtags #ToHelpMyAnxiety and #MentalHealthAwarenessWeek.  

Anxiety

Anxiety is one of the more common and well-known mental health problems faced by millions of people every day. It relates to a feeling of unease or worry that may be severe or mild. Those suffering with anxiety may find that their feelings are constant and can affect their daily life. They can affect those suffering both mentally and physically. Some of the most common symptoms are:
  • Feeling of unease, worry or fear
  • Noticing an increase in heart rate
  • Loss of appetite
  • Breathlessness or chest pain
  • Withdrawing from friends or family
  • Struggling to sleep
  • Struggling to concentrate
  If you feel that you may be experiencing anxiety, we recommend seeing a healthcare professional such as your local GP. Anxiety varies from person to person. For some, becoming more active, practicing breathing techniques, seeking debt advice, or an improvement in diet may reduce symptoms of anxiety.  

Financial Stress

Debt and mental health problems are intricately linked. In a recent Trust Deed Scotland® survey, 91% of our customers said that their mental heath had been impacted by their debt problems. 84% also said that their mental health had improved since entering into a debt solution with us. Few debt problems are unsolvable, there is always a route. The cost-of-living crisis is set to plunge over 450,000 people in Scotland into debt. A further 644,000 people are predicted to be pushed further into their existing debts.

Additional Mental Health Services & Support in Scotland

For those seeking additional mental health support, below are some local organisations who are able to provide further help. Scottish Association for Mental Health ☎ 0141 530 1000 info@samh.org.uk Change Mental Health ☎ 0300 323 1545 info@changemh.org Breathing Space Scotland ☎ 0800 83 85 87 Health in Mind ☎ 0131 225 8508 hello@health-in-mind.org.uk See Me Scotland info@seemescotland.org Action In Mind ☎ 01786 451203 info@actioninmind.org.uk Mental Health Foundation Scotland ☎ 0207 803 1100 scotland@mentalhealth.org.uk  

Debt Help

Here at Trust Deed Scotland®, we give advice on all formal debt solutions available in Scotland. There are a number of solutions available which suit a variety of circumstances. Formal solutions such as a Trust Deed or the Debt Arrangement Scheme allow you to freeze interest and charges while repaying your debt at an affordable and realistic rate. Some solutions, such as a Trust Deed can also often allow for a portion of debt to be legally written off. Our experienced and non-judgemental team also provide the necessary signposting for the relevant mental health support if necessary. The debt advice team at Trust Deed Scotland® can also give you the advantages and disadvantages of both solutions plus alternative formal Scottish debt solutions available for Scottish residents. Call us on 0141 221 0999 for more information.

Is Equity Release Right for You?

Posted on by Craig Stocks
When it comes to debt, there are many aspects to consider before deciding on the right debt solution for you. For those with a mortgage, a term that is often used with regards to your debts is “equity release”. Equity is the difference between the value of the home and the total of the mortgage, and any loans secured on it. Equity release refers to cashing in on the equity from the home without having to leave it. The money is released either in a lump sum or a steady stream of income using the value of your home. Those releasing equity from their homes usually need to be homeowners over the age of 55. The value of the property will also affect a person’s eligibility and the amount the lender is willing to offer. Equity release can be helpful for those looking to increase their income, pay off existing unsecured debts, or pay for care needs later in life. If you think that you may be eligible for an equity release and that releasing equity from your property may be the best way to deal with your debts, it’s highly recommended that your next step is to seek advice. Our experienced debt advisers can discuss all of the options available to you so that you can make an informed decision on your next steps.  

Types of Equity Release

There are two main types of equity release schemes. Each one works differently and deciding on the suitable option will depend on your circumstances and goals.   Lifetime Mortgages A lifetime mortgage gives a person funds in either a lump sum or in smaller amounts over time. The maximum amount of money that can be borrowed will be agreed with the scheme provider. Those who take out a lifetime mortgage will remain the owners of the property. Lifetime Mortgages do carry interest which can either be paid or allowed to build up over time. The loan along with any interest will be paid back wither when that person passes away or moves into long-term care.   Home Reversion Home reversion is the less common form of equity release. Under this scheme, a person will sell all or part of their property to a home revision company who will then provide a lump sum of money or regular monthly payments. A person can continue to live in the property until they pass away or sell their remaining share. Once the property is sold, the home reversion provider will be paid the agreed share of the final sale price.  

Risks of Equity Release

Equity release is not suitable as short-term loan. It’s a long-term commitment which needs to be carefully considered before proceeding. Equity release plans are generally designed to be paid back only when you die or move permanently into care – if your partner isn’t on the equity release and they outlive you, they could be forced to move house. There are a few risk factors to consider before deciding on releasing equity from your property. Releasing equity will reduce the overall value of the property and may affect your entitlement to state benefits. If you opt for a home reversion plan with your equity release, the company providing the plan will acquire the deeds to the property. If your home increases in value from here, you will only benefit from the increase in the proportion of the property you still hold. Similarly, any decreases in value will be shared by both you and the loan equity provider. Once you’ve taken out the equity release, if you decide to downsize to a smaller property, you may be required to repay the equity, either in part or in full. The final consideration is what happens when you pass away. The property you released equity from will be sold by the equity provider, and the equity (plus any interest) will be paid off. Any extra money from the sale will go to inheritance as normal. For those looking to leave the property as a place of residence for loved ones, equity release may not be the best option. For advice on equity release as well as all formal Scottish debt solutions, contact Trust Deed Scotland®. Our experienced debt advisers will be able to provide tailored advice based on your individual circumstances and allow you to make an informed decision on the right decision for you.

Young Scottish People in Debt

Posted on by Craig Stocks
Debt amongst young people in Scotland is at an all-time high. There is a new generation who have access to credit and are finding themselves with debt they can’t afford. There are an estimated 60 million credit cards in circulation in the UK, with an estimated two thirds of UK adults having at least one. Almost half get their first credit card between the ages of 18 and 24. More than half of 18- to 24-year-olds in the UK have fallen into debt in the past 12 months or expect to do so in the next 12 months, and 81% of young people in the UK feel anxious about money. When looking for the root cause of this, there could be a few options.  

Low Income and a Poor Economy

In Scotland, the National Living wage for someone over the age of 23 is £10.42 an hour. However, basic minimum wage for 18–20-year-olds is £7.49 and for 21–22-year-olds it’s £10.18. This means that for someone between the ages of 18 and 20, a full-time wage would be £1,175 a month after tax compared with someone over the age of 23 who would earn £1,503 a month after tax. 45% of jobs in the UK that pay minimum wage or below are within retail, hospitality, cleaning, or maintenance occupations. 16-24-year-olds make up just 10% of the total workforce, but they make up around half of workers in hospitality roles. This means that there’s no surprise that almost half of young people are unable or just about managing to make ends meet each month. It’s worth noting that Generation Z have about 86% less buying power than Baby Boomers did at the same age. To add to this, the average house in the UK currently costs around nine-times the average earnings however, in the 1990s the average house was only four times the average salary. This means that young people do not have the same access to financial security that previous generations had. In fact, just 41% of young people believe others like them will ever be able to buy their own home, and only 51% think they will ever earn enough to support a family.  

Poor Financial Education

Poor financial decisions may be able to be put down to a lack of financial education. How to have healthy finances is something that is rarely taught at school, meaning that there are thousands of graduates each year that are plunged into a world of easy credit without the knowledge to understand the consequences of using it. There is also a worrying trend of young people’s reliance on Buy Now Pay Later services. Nearly a third of 18-34-year-olds don’t realise that they can get into debt using Buy Now Pay Later services. To add to this, 53% of 18-24 year old’s have either accidentally or intentionally missed a credit card payment in the last two years.  

Poor Money Management

Lowell, a company who purchases debts from other lender, have found that 68% of young people in the UK reported that a lack of money management skills was a key factor in driving them into debt. Interestingly, 46% of 16-34-year-olds are in debt due to purchasing luxury items. With 62% of 16–32-year-olds having spent money on them in the last six months, luxury items are a large factor when discussing poor money management. Luxurious purchases can be dangerous if a person does not have the means to foot the bill. They are difficult to resell and a large majority of them immediately lose value, making them poor investments. A continuous change in trends means that many are turning to credit to keep up with their shopping habits. More than one in five young people are taking out credit or using Buy Now Pay Later schemes on a monthly basis to buy designer gear, with over 10% in more than £1,000 worth of debt on the platforms. It’s worth noting that there are two sides to this point. Yes, there is an element of poor money management or poor financial education. However, Generation Z already have the odds of financial health against them. This, for some, results in further poor financial decisions as they believe it will make no difference. To add to this, the chances of a young person being able to get on the property ladder without significant financial support is very slim, therefore they do not have a pressing reason to save their money.  

Debt Help Available

For those who have found themselves with unaffordable debt, there are solutions that can help. Here at Trust Deed Scotland® we provide advice on all formal debt solutions that are available in Scotland. Our experienced debt advisers will be able to discuss your situation and provide you with information on all of the solutions that would suit your individual circumstances so that you can make an informed decision on what is right for you. A Trust Deed is an example of one of the solutions that we offer. A Trust Deed provides legal protection from the people that you owe money to, while freezing interest and charges. It allows you to consolidate all of your debt repayments into just one affordable payment for a period of four years. At the end of the 48-month term, the remainder of the debt is legally written off. Another example of a debt solution that we offer is the Debt Arrangement Scheme (DAS). The DAS, like a Trust Deed, allows you to consolidate your debt into one affordable monthly payment while freezing interest and charges. The difference is that you would pay that affordable payment until the full debt amount is paid. If you think that a debt solution may be the right option for you, you can try either our WhatsApp debt advice service, or quickly check your options using our Trust Deed Wizard tool. Call us on 0141 221 0999.

Elderly and in Debt

Posted on by Craig Stocks
The vast majority of the population spend most of their adult lives saving for retirement and paying into a pension. However, the cost of living crisis has seriously affected everyone, with the elderly being no exception. Countless are experiencing the struggle for their pensions to keep up with the steep hike in everyday prices. Unfortunately, one in seven people aged 65 and over has been turning to loans and credit cards to make ends meet during the cost-of-living crisis.  

Low Income and High Costs

The average pension income in the UK is £1,564 which is equivalent to the minimum wage for someone who works full time. It’s true that the older generations are much more likely to own their own home and have potentially paid off their mortgage. However, it’s expected that the number of retired couples who privately rent will double within the next 10 years.  Even though the older generations are less likely to be paying rent or a mortgage, their everyday costs will have risen along with the rest of the population, yet they do not have the means to increase their statistically low income. 45% of those aged 50-plus currently find it difficult to afford their energy bills. Devastatingly, last year 8,500 elderly people died as a result of living in cold homes. Almost two thirds of elderly tenants have cut back on their everyday spending in the recent climate. To add to this, 71% have said that they would not be able to afford a £50 rise in expenses. For someone who has worked their whole lives and paid into a pension that they believed would support them in later life, this will feel frustrating. This has even led many to an increase in the elderly using credit to keep up with their expenses. When desperate for credit, it can be easy to lose control of what is owed. For example, over five million adults in the UK aren’t sure how much they owe in outstanding debts. To add to this, two thirds of Brits have admitted to having debt that weighs them down. The elderly may not have the means, the knowledge or the time to face the debts that they build up, leaving them in a difficult position financially.  

Struggling in the Digital Age

According to Age UK, older people are traditionally seen as living within their means and reluctant to use credit. However, stagnant income and low returns from savings along with rising basic costs are adding to financial pressures on many retired people. In the future there may be an increase in elderly people in debt as the younger generations move up. This is because the younger generations are far more familiar with debts and having access to credit digitally. For now, the older generation is still relatively new to the digital age. Older people are more likely to struggle when dealing with finances digitally. This could lead to them missing credit payments or taking out credit and not understanding the terms of the agreement. According to Compare the Market, 31% of those over 65 aren’t using the internet at all and are still digitally excluded. Furthermore, 43% of over 65’s are narrow internet users who only go online for a small number of activities.  

Debt Help Available

For those who have found themselves with unaffordable debt, there are solutions that can help. Here at Trust Deed Scotland® we provide advice on all formal debt solutions that are available in Scotland. Our experienced debt advisers will be able to discuss your situation and provide you with information on all the solutions that would suit your individual circumstances so that you can make an informed decision on what is right for you. A Trust Deed is an example of one of the solutions that we offer. A Trust Deed provides legal protection from the people that you owe money to, while freezing interest and charges. It allows you to consolidate all of your debt repayments into just one affordable payment for a period of four years. At the end of the 48-month term, the remainder of the debt is legally written off. Another example of a debt solution that we offer is the Debt Arrangement Scheme (DAS). The DAS, like a Trust Deed, allows you to consolidate your debt into one affordable monthly payment while freezing interest and charges. The difference is that you would pay that affordable payment until the full debt amount is paid. If you think that a debt solution may be the right option for you, you can try either our WhatsApp debt advice service, or quickly check your options using our Trust Deed Wizard tool. Call us on 0141 221 0999.

Women with Unaffordable Debt in Scotland

Posted on by Craig Stocks
StepChange debt charity recently revealed that over 60% of their new clients are female. In comparison, just under 50% of Trust Deed Scotland’s customers identify as female. When discussing women with unaffordable debt in Scotland, there are many factors at play. It does not necessarily mean that women struggle with unaffordable debt more than men. Indeed, the cost of living crisis is affecting many people across Scotland at the moment, with more people searching for Scottish Debt Help than ever before; all of us are effected regardless of gender. It could mean that women are more open to accepting help and support, or more likely to recognise when they are in a situation that is unaffordable. Studies suggest that men are more likely to have a higher amount of debt, but that there is a higher number of women that are in debt. There is no sole reason why people find themselves in debt, but it’s clear that debt is something that many women are battling with.  

Gender Pay Gap

The Gender Pay Gap (GPG) is often one of the first things that people think of when discussing the finance differences between men and women. The GPG is not the case of women being hired at a lower salary to men, or women and men being paid differently in the same roles. Rather, it is the difference in the average earnings of male and female employees. It is a complex issue that can be attributed to a few reasons:
  • Fewer women choose high paying careers
  • A higher number of women work part-time
  • Fewer women compete for promotions and raises
  • Taking career breaks to raise a family
The current GPG in the UK is estimated to be around 15%. Lower earners may have no alternative option other than taking out further credit or unfavourable loans to deal with unexpected payments or a rise in everyday costs.  

The Motherhood Penalty

Women are more likely to have gaps in their employment or work part-time due to bearing and raising children. It’s estimated that the Motherhood Penalty makes up 80% of the GPG, which could explain why it is still very much a real issue in the UK. Time away from careers can impact promotions, pay rises, or the ability to improve learning and skills.  

Single Parents

Of the almost 3 million single parents in the UK, it’s estimated that 90% of them are women. It’s worth noting that the national average salary for single mothers in £28,794. This equates to £1,966 a month after tax, yet the average cost of full-time childcare is £1,079 a month in Scotland. This is a clear reason as to why many women give up work, work part-time, or take on lower-paying roles that offer more flexibility.  

Economic Abuse

Economic abuse is a common form of abuse in intimate and family relationships. Both men and women can be victims of domestic abuse. Unfortunately, 1 in 4 women in the UK will experience an abusive relationship at some point in their lives. In recent years, there has been increased focus on economic abuse. Economic abuse involves the control of a partner or ex-partner’s money, finances, and things that money can buy. Some examples of economic abuse are:-
  • Controlling your access to money
  • Taking out credit in your name, without your permission
  • Taking your paycheck
  • Preventing your work or education opportunities
  • Forcing you to justify every purchase made
  • Insisting all bills are in your name, leaving you eligible for any arrears
  • Stealing from you
  • Refusal to contribute to household costs
Economic abuse can plunge the victim into debt or prevent them from being able to get out of pre-existing debt. If you, or someone you know is dealing with economic abuse, below are some places to seek help and support.   If you are in immediate danger, please call the police on 999. Women’s Aid Online Chat Domestic Abuse and Forced Marriage Helpline (Scotland) – 0800 027 1234 Men’s Advice Line – 0808 801 0327  

Debt Help Available

For those who have found themselves with unaffordable debt, there are solutions that can help. Here at Trust Deed Scotland® we provide advice on all formal debt solutions that are available in Scotland. Our experienced debt advisers will be able to discuss your situation and provide you with information on all the solutions that would suit your individual circumstances so that you can make an informed decision on what is right for you. A Trust Deed is an example of one of the solutions that we offer. A Trust Deed provides legal protection from the people that you owe money to, while freezing interest and charges. It allows you to consolidate all of your debt repayments into just one affordable payment for a typical period of four years. At the end of the minimum 48-month repayment term, the remainder of the debt is legally written off. Another example of a debt solution that we offer is the Debt Arrangement Scheme (DAS). The DAS, like a Trust Deed, allows you to consolidate your debt into one affordable monthly payment while freezing interest and charges. The difference is that you would pay that affordable payment until the full debt amount is paid. If you think that a debt solution may be the right option for you, you can try either our WhatsApp debt advice service, or quickly check your options using our Trust Deed Wizard tool. Call us on 0141 221 0999.