Debt advisory services both north and south of the border have never been busier, providing advice to scores of families who have been pushed to the financial brink due to the seemingly endless rise in the cost of living.
The failure of wages to keep pace with inflation has really tightened the screw and forced families to dip into savings and seek credit in order to make ends meet.
Indeed, it is the second of these so-called options that have really exacerbated the debt problem in Scotland and elsewhere.
Austerity measures throughout the UK have caused financial difficulty for a number of groups as the government have cut grants to councils and support streams for individuals. As a result, several people are struggling to afford paying for their food, rent and household bills.
Therefore, it should come as no surprise that young people in Scotland are suffering financially.
With organisations and politicians under increased scrutiny to lower their expenditure, there is a lack of employment options for all Scottish and British residents which has negatively affected the financial security of those aged between 16 and 24. Ten per cent of British people in this age group are finding the current economic climate ‘difficult or very difficult’ according to a recent report published by the Office for National Statistics (ONS).
Research carried out by Citizens Advice Scotland alarmingly revealed that a quarter of young people in Scotland have been in debt before turning 22. Approximately a third of all debts exceeded £5,000 placing a huge amount of pressure on Scotland’s youth.
When finances are stretched one short-term fix a large number opt for is a risky loan from payday loan companies. These lenders may seem like a competent way of combating debt at the time, but their high interest rates often result in customers being worse off than before so their difficulties prolong.
An adequate way of reducing your debt without the threat of spiralling interest rates is by choosing to receive support from us at Trust Deed Scotland, thanks to our 5/5 TrustPilot rating from thousands of reviews. This gives our company unrivalled credibility and vital trust for people in hardship.
Unlike payday lenders, those who sign up for a Trust Deed settlement only repay what they can afford. Our staff’s motives are to help people in need of financial support, not boosting profits as loan companies often do.
More evidence from the ONS demonstrated that unemployment for Scottish youngsters rose by nine per cent in the last 10 years, with 21 per cent of young people jobless.
Late teenagers and people in their early twenties should not be worrying about their economic situation and we are committed to offering affordable repayment plans here at Trust Deed Scotland. In most cases, you will have two years to repay what you owe meaning you shall be able to keep your home and car.
These are also speedy to set up – taking around five or six weeks generally. This eases the burden of debt on our clients who regain a sense of freedom from paying back affordable monthly fees.
Another advantage of managing your debt with a Trust Deed is that creditors are powerless to take legal action as soon as your Trust Deed is protected. With young unemployment rising, the number of 16 to 24-year-olds in debt has also increased.
Our Glasgow office and phone lines are open for anyone who needs urgent Debt Help Scotland for their cash problems.
One of our friendly experts shall be willing to speak with you today. We’ve been giving Debt Advice in Scotland since 2009 and became the No.1 rated on TrustPilot.
In January 2015, caps on payday lending were introduced across the UK in an effort to stem the tide on the snowballing debt problems faced by many people throughout the country. The new set of rules have been designed to protect those who have used – and in some case become reliant on – the countless numbers of payday lending companies that are now ever-present within our society, but for people in Scotland there are still many question marks still hanging over the people in vulnerable financial positions.
Scotland, however, is hit worse than the rest of the UK and in light of this there are calls for more evasive courses of action in order to overcome these problems. Mike O’Connor, chief executive of StepChange, has said “Scotland has suffered more from the rise in payday loans than other parts of the UK. New rules for payday loans are a welcome start to 2015.
“They will help address problems within the payday loan industry which have made bad situations worse for thousands of people. We want to see a mandatory real-time database for payday lenders to share information, limiting the risks of unaffordable multiple borrowing.”
But what does the cap actually mean for borrowers? Fees and daily charges are limited to 0.8 per cent of the loan amount, and default charges have been left capped at £15.
Fees and interest will never account for more than the initial loan value, with the 100 per cent total cost cap also coming into full effect. While extremely useful for those borrowing small amounts, for those that have debts that run into the thousands it may act as only small consolation.
Although in theory, putting a cap on these short-term loan companies can only be a good thing. People can only find themselves accumulating a certain amount of debt, and the worst practices within the cut-throat market of payday loans left consigned to the past. But without widespread action on personal debt, with the root problem – the debt itself – still prevalent within society in Scotland, this cap may well prove to be a drop in the ocean of financial issues.
The regulations have all been taken over by a UK regulatory body, which may offer some hope for people wanting further reform within the sector, but ultimately these changes take a while to be passed legally. It is the smaller changes that ultimately may have a bigger effect in the long run – for example, free debt advice is now a mandatory requirement for those in difficulty, something that can only be beneficial for all parties involved.
While increased spotlight from the media has led to increased scrutiny from authorities, it would be naïve for us to believe debt problems and injustice begin and end with the underhand tactics employed by payday lending companies. With numerous other deregulated avenues for people to pursue when in need of a quick financial fix – not all of them legal – payday loans may soon be seen as the ‘safe option’ when it comes to borrowing.
Letting the cap lull us into a false sense of security regarding short term loans, in reality, is equally as damaging as doing nothing about it at all.
Here at Trust Deed Scotland, we are firm believers in tackling your debt problems head-on as soon as possible. Some recent questions we’re being asked by people suffering at the hands of payday loan lenders include:
Is an IVA the same thing as a Trust Deed?
By fixing yourself into a Protected Trust Deed plan, you provide yourself with a much greater opportunity to get out of the red and into the black in the most amicable way possible. We take care of communications with your creditors and provide you with the structure and guidance that is absolutely integral to financial recovery.
Trust Deeds are an extremely real pathway out of debt. For more information on the services we offer, or how to apply for a personalised Trust Deed illustration, contact one of our team immediately. We’ve been giving Debt Advice in Scotland for over a decade and have helped thousands of people look forward to a brighter future.
