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Devon and Cornwall has worst level of debt in the UK

By Western Morning News  |  Posted: October 05, 2012

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Westcountry families are being forced to borrow hundreds of pounds every month to put food on the table as government austerity measures continue to hit the region.

A grim report has shown people working in the South West need an extra £408 on average each month to keep their heads above water.

The figure is the highest in the UK according to the research tracking thousands of working people's lives through the economic crisis.

The survey, commissioned by Britain's largest union Unite, also showed 59% of respondents in the region have been so desperate that they have asked to do overtime at work in a bid to cut their debts – but found their requests have been turned down.

In contrast, some people have found they are better off claiming benefits as people on lower incomes can claim Working Tax Credit.

Chris Griffiths, of East Devon Citizens Advice Bureau (CAB) , said: "One young male client said he had offered to do less hours at work to maintain his level of tax credit. But the employer refused and he ended up leaving."

Devon CAB said over the period April 1 to June 30 it dealt with identified debt of £5.8 million and £2.5 million of financial gains for clients.

Exeter CAB said this year it has received a 4% increase in inquiries about debt and money problems, such as credit cards, unsecured loans and overdrafts, and inquiries about bankruptcy and debt relief orders. The average value of debt per client is £12,445, with the average amount owed to each creditor at £2,326.

Cornwall CAB now deals with debt problems in 60% of client cases. The average value of debt per client is £14,500 for families.

Graham Tierney, chief executive of CAB Cornwall, said many clients would never pay off their debts.

"We have noticed a steady rise in debt problems over the past few years. It will take the average couple with children 1,300 years to pay off debts. This alarming situation is even worse for the over-50s who have virtually no hope of erasing debts on average of £21,500."

He added: "Debt has always been a problem, but now it is at the worst level ever. There is little prospect of things improving with increasingly dire forecasts. For some people the best outcome is bankruptcy."

Poverty-stricken families in Devon and Cornwall are increasingly turning to food banks to help meet their needs. Figures show food banks have fed more than 100,000 people in England in 2011-12, a jump from almost 41,000 in 2009-2010.

Keith Ponsford, Bude New Life Centre Manager, said: "Usage of the Bude food bank has increased greatly over the past couple of months. We have set up a volunteer-led community money advice scheme to help people manage their debt levels which will be in operation within the next week. We are anticipating that will be a busy service."

Mr Griffiths said: "Food banks are springing up all over the place, which isn't a bad thing.

"But you wouldn't expect so many people in the 21st century to be impoverished enough to need them. It is a worrying trend that people in Devon are struggling to put food on the table."

Local shops and businesses are also being hit as 78% of respondents admitted they had cut back on their monthly spending budget.

Blame for the economic woe is being put firmly on the government with 59% in the South West claiming its economic policies were directly harming them.

Laurence Faircloth, Unite regional secretary in the South West, said: "These figures show the grim picture facing working people across the South West. Thousands are struggling with the impact of the cuts, a failing economy and rising prices.

"But rather than take the positive radical action necessary, this government continues to stand on the sidelines and do nothing to help people through our dire economic situation."

Hundreds of workers in the South West will take part in the TUC march in London on October 20.

Nigel Costley, regional secretary of the South West TUC, said: "People have bought into the idea we need to make sacrifices to survive. But this bad medicine is only making the patient worse.

"In Devon and Cornwall wages are low, debt levels rising and public sector services being cut. Anger levels are risings as the government proposes to make further cuts. It is an unfair approach to economic growth."

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  • Juan11_1  |  October 07 2012, 1:02PM

    As I understand it this article refers to a survey which shows an increasing number of people turning to payday loans to make ends meet. Those who resort to 'sub prime' lenders such as those advertised on TV find the interest rates can be anything up to 4000% - or more. This seems to me to be excessive by any standards. I hope the Office of Fair Trading (2 - 6 Salisbury Square London EC4Y 8JX) can be persuaded to review its decision not to limit these charges.

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  • Democorruptcy  |  October 06 2012, 12:45PM

    Yet North Devon council are going to do a First Time Buyer scheme where they take liability for 20% of the house. This allows the FTBs to buy something they cannot really afford and mires them in debt paying too much for a house. Houses are too expensive and should correct down to what people can really afford. With councillors deciding to divert our council tax to support house prices and enabling some people to overpay for a house it means others are also likely to have to overpay. Thus this scheme is miring even more people in debt. Of course the banks are laughing because if the house price does drop another 20% (Halifax now £159k from £199k in 2007 so house prices do not only go up!) it's the council i.e. us that have to pay not the bankers who keep their bonuses from the lending. These FTB council schemes should be banned. They are not helping FTBs they are helping banks by guaranteeing them a bailout in advance. What would help FTBs is cheaper houses and these schemes make that less likely. Who decided that councillors could use our council tax to speculate on property prices? Was it the same people who decided they could chase an extra 1% interest in Icelandic banks, which in effect was also betting on a property bubble?

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  • Plymouthking  |  October 06 2012, 1:48AM

    all money is debt!

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  • Strongbowman  |  October 06 2012, 12:17AM

    T_K, thank you for a measured response. Your first comment about my being 'geographically challenged' doesn't really work though. My statement that Cornwall is part of England was not geographical but political and is currently correct. I will indeed look further into this as I love Cornwall and have lived here for most of my life, though I feel that the examples you give are largely demonstrative, certainly unilateral, and I don't believe are accepted by your (our) government. The one in Whitehall. Having said that, though an Englishman living in Cornwall (England) I have mixed feelings about your stance. I believe in 'small' government and therefore appreciate your efforts in breaking away from central rule but, contrastingly, am concerned about the potential for 'nationalism' *chuckle* in the 'Cornish Nation'.

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  • Bilge11  |  October 05 2012, 8:30PM

    Coincidence or what? We are no longer allowed to (voluntarily) work Saturdays (flat rate), suits me. So our standard 47.5hr week. However, I've had to put up with a 30yo moaning all day. Him and his partner have a cheap flat, via her folks, they each have jobs, his is £10+/hr. Yet they each have £40/mth mobile contracts and pay Virgin Media around £80/mth. They both drink/smoke, and I'm supposed to feel sorry for them that they cannot 'manage'. Some of us 'old'uns' have tried to help/educate him with money management, but they know best!

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  • The_Real_SKoM  |  October 05 2012, 6:12PM

    whinger7643 Not only does it believe it stops at Exeter, it seems to believe there is a huge chasm between Exeter & Bristol - unless they need somewhere to stick houses.

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  • whinger7643  |  October 05 2012, 5:22PM

    Whilst there will always be wasters and bad managers, this sh*thouse of a government believes the world ends at Exeter and it would be a miracle if they ever steer any investment our way.

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  • Truro_Kernow  |  October 05 2012, 5:20PM

    I am a little older than the poster 'Truro_England' and must admit to knowing that there is a Truro in Cornwall which as we all know is next to England, just like Wales as well as Truro's in Nova Scotia and Massachusetts but I never realised there was one in England. This indebtedness will lead to poverty which is an increasing result of the failed Westminster system of Government for it is they and their bosom buddies, the bankers, who have visited this upon the ordinary people. Whilst we encourage this form of Government, poverty will continue. I can't and do not speak for England as they are next to my country although I willingly recognise that we are all inhabitants of Great Britain as a geographical entity. Good luck in England 'Truro_England'. I trust you will enjoy it there. Try Bradford, Manchester or Wolverhampton perhaps? Fine places for you and they should make you really proud to be English which of course, I am not,

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  • rcliffe  |  October 05 2012, 1:13PM

    There are plenty of individuals who have been foolish and indulgent and allowed themselves to be wooed into unsustainable levels of debt by amoral banks and finance companies who treat the public as prey. That said there are also many millions of people in the UK living not much above subsistence level. We are going to see spiralling levels of poverty and markedly increased homelessness in the UK over the next 5 years as support for those at the very bottom of the heap is reduced. The age group that is really going to feel it are older adults and especially older women as official retirement age moves out to 65 and beyond. This group have enormous difficulty getting work once out of a job. With unemployment benefit set at £71/week anything other than a very short period of unemployment is disastrous. The 'light at the end of the tunnel' was reaching retirement age whereupon Pension Credit guaranteed £142.70/week or if a couple £217.90 week. We are going to see people in their mid 60s who have been subsisting on £71/week for years because, with flagging energy level and mediocre health nobody wants to employ them. And what is Cornwall Council doing to help this situation – it is proposing to require all recipients of Council Tax Benefit to pay 30% of their Council Tax – typically £350 + a year or 5 weeks benefit. The alternative of adding 2.4% to the Council Tax to cover Government reductions in funding of CT Benefit has been discounted.

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  • josdave  |  October 05 2012, 11:14AM

    I am sure in this day and age nobody goes short of essentials unless the money is spent on non essentiuals such as alcohol. tobacco etc. Anyone can budget but there are a lot who think they can live on credit and when the bills start coming in plead poverty. These people I have no sympathy for at all.

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