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| Photo used with kind permission of The Leigh Journal |
Over 500 people signed the Debtbusters petition at the event launches attended by Yvonne Fovargue, Lisa Nandy and myself.
Wigan & Leigh Debtbusters is set to raise awareness of the detriment caused by payday lenders and others and that affordable loans, free help and advice is available through the Borough’s Credit Unions and Citizens Advice Bureau.
The campaign launch comes against a background of growing statistics that demonstrate the impact of debt on UK households. The Office of Budget Responsibility (OBR) sets out how Household debt is set to rise by 36.3% in the next three years. By 2015 UK households will have amassed over two trillion pounds worth of debt.
39% of people are concerned about the amount of debt they owe and 43% think their personal financial situation will worsen in the next six months. A staggering 45% of people now say they frequently struggle to make it to payday, up by 8% since Christmas 2010.
In November 2011, 16% of individuals had become ‘zombie debtors’ – only able to service the interest of their debt and not reduce it, whilst 27% had no savings at all.
One in three (32%) of those who took out a ‘payday loan’ couldn’t pay it off, so had to get another one (so called ‘rollovers’).
The high-cost credit sector, made up of payday lenders, home credit providers and hire purchase agreements, is growing rapidly and increasingly causing many of its customers to get into severe
debt problems.
Campaigners have welcomed the news that a cap on the cost of credit is set to be introduced but they warn that this is only the ‘tip of the iceberg’ and that regulation of the industry is required.
Labour & Cooperative Councillor for Astley-Mosley Common Jo Platt is set to raise the issue at this week’s full council. Cllr Jo Platt said, “Residents of the Borough are calling for action against legal loan sharks. Over the past couple of years they have proliferated in our area and the tough financial times means more and more people are turning to them and the extortionate loans which they offer.
“This motion sends a message that Wigan Council is serious about supporting our residents who are facing financial hardship. We support the introduction of a limit to cap the amount these companies can charge for loans, and we are committing to doing what we can locally to support responsible lending and discourage the loan sharks.”
A toxic mix of the rising cost of living, unemployment and wage freezes mean many Leigh households are struggling and a lack of regulation of this market by the Government means these legal loan sharks are
exploiting this to push many families further into debt.
With one in three payday loans taken out to pay off other payday loans it is clear these high cost credit products are problematic.
You can tweet your support for the campaign using the hashtag #WiganLeighDebtbusters
