If the recent welfare reforms are anything to go by, the future is looking rather bleak for low income families here in the UK. A recent poverty research project has revealed that the typical household debt currently stands at around £3,000. This has risen by a notable £670 since October, a 29% change for the worse.
Bedroom tax and more
This demographic was hit hard by the ‘bedroom tax’ reform amongst other welfare changes brought about by the current government. A typical family in this sector is living on around £176 per week with a £34 chunk being swallowed up by debt repayment. Once the rent, food, and bills have been factored into the budget, there is simply nothing left. Less than £40 is available for each family’s food outlay, yet they pay more than a fifth of their income on heating and fuel bills.
These findings were the result of a series of housing association group studies. The Real Life Reform project took data and interviews from up to 100 householders in order to get an accurate set of research based results. The study also revealed that more of this demographic are now turning to loan sharks just to get to the end of each month. Having to borrow from this source just to simply make ends meet is a very worrying trend indeed. This survey is number four from a total of six and the results have shifted since the last one back in autumn 2013. The typical householder went on record stating that they would try their hardest to avoid going deeper into debt. Yet the latest figures show just the opposite has now happened. The number of households in serious debt has actually risen be four percentage points and nearly one in seven of this group would take at least 4 years to pay the outstanding balance back.
Daily household spending on food was now at an average of £3.08, and this was up from the £2.10 measured back in October. Fuel spending has also risen by a notable 8% and household fuel bills have risen by a weekly £7. The welfare reforms are in place to help the lower income based families meet their basic needs, but these figures seem to tell a different story altogether. Although the current government spend £94 billion a year to help people on welfare deal with the bills we have just discussed, it seems that even more help is going to have to be factored into this grim scenario.
If you are currently disappointed with these latest welfare reforms, or you simply need some help dealing with your debt situation, please speak to us at Dissolve Debt. We have been helping UK families and individuals just like you come to terms with their debt situation. We will work out a bespoke debt recovery plan that works for you and once you have spoken to our team of helpful advisors via our 24/7 helpline, you will soon be looking forward to a debt-free future!