Displaying items by tag: debt

Left-leaning Luisa González and centrist Daniel Noboa have faced each other in the last debate before the run-off election on 15 October. The debate gave both candidates a platform to address long-simmering issues in the country. The economy remains Ecuador’s Achilles heel: at the end of 2022, debt alone accounted for 57 percent of the GDP. The other major issue facing the candidates is crime. Ecuador, once one of the most peaceful countries in Latin America, is now on track to become the third-most violent country in the region. In August, that violence spilled over with the assassination of presidential candidate Fernando Villavicencio in Quito. Since then, candidates have been wearing bullet-proof vests. Noboa is ahead in the polls, but many Ecuadorians have not yet made up their minds about who to vote for.

Evarline is hundreds of pounds in debt, after paying a pastor to pray for her. She lives in a Nairobi slum and can no longer provide for her four children. Evarline lost her job so when she heard about a pastor whose prayers could make life better, she went to see him. He asked her for 15,000 Kenyan shillings (£96). This is called a ‘seed offering’: a financial contribution to a religious leader, with a specific outcome in mind. She borrowed the money from a friend, who took out a loan on her behalf. She had been told this pastor's prayers were so powerful that she would see a return on her money within a week. The miracle never came. The loan her friend took out ballooned due to unpaid interest. She has no idea how she'll pay it back. Her friend has stopped talking to her. She still has no job.

The Universal Credit extra payments helping people through Covid have ended, amid fears that many lives will get worse not better this winter. 29-year-old Lynton Lockett is embarrassed to show people his kitchen. A leaking kitchen tap caused mould on the floor and walls. The dampness has brought an infestation of fruit flies. Lynton showed the kitchen to plumber James Anderson who runs a community initiative called DEPHER CIC that provides free heating and plumbing services to people who can't pay for them. James anticipates a 50% increase in calls for help this winter. He has started giving food parcels to struggling families. He said that the end of payments, the higher cost of living, a rise in gas prices and the end of furlough puts too much financial pressure on families. He added, ‘You can't hide the truth. If this continues, people are going to die.’ See also

As we prepare for a different Christmas, thousands of families will be carrying the mental exhaustion of an unwelcome guest - debt. Debt erodes confidence and brings a whole host of stresses, and strains this festive season. Furlough, income reduction, job losses have all taken their toll. The recent collapse of Debenhams and Arcadia put a further 25,000 jobs at risk, on top of the thousands of jobs already hanging by a thread. Our poorest communities are hit hardest, with little or no savings to fall back on, and are unable to cope with the income shocks that this year has brought. Heating or eating is a brutal choice for many families. Pray that those struggling with financial problems and feeling isolated will realise that they are not alone and there is no shame in needing debt advice. May those needing such advice be put in touch with the agencies who are able to support them.

Britain's personal debt mountain is growing. Households borrowed an extra £20bn on credit cards and have £45bn more personal debt than they did a decade ago – an increase of 25%. In 2019, total unsecured debt (credit cards, personal loans and overdrafts) was £225bn. A decade ago Britain was near the peak of cheap credit-fuelled debt binges. Many hoped that personal debt would be reined in. This has not happened. Borrowing increased as wages failed to keep pace with inflation. These statistics do not include secured borrowing such as mortgage debt or student loans, which increases the figure substantially. Experts believe the personal debt surge is due to credit becoming cheaper towards the end of the decade. StepChange, a debt charity, recently estimated that across Britain, over three million people fell behind on an essential household bill in the last 12 months.

Buy Now Pay Later (BNPL) borrowing includes catalogue credit, store cards and retailers finance at the point of sale. New measures require retailers to present BNPL offers more clearly, give adequate explanations of costs and negative consequences; and prompt people when the 0% interest period expires to allow them to repay the full balance before incurring charges. Debt charity StepChange welcomes the modest changes, but doubts whether they will fully achieve their objective. It would like to see a closer look at the use of discounts and incentives, and would like to see continued scrutiny in this area, to ensure consumers are protected against poor practice. Citizens Advice said, ‘The new rules won’t stop people being hit by unexpected costs on unpaid amounts. To protect people better, the FCA should only allow firms to charge interest once the promotional period ends.’

The Office for National Statistics (ONS) reports that the proportion of UK residents' disposable income that goes into savings has fallen to a record low. The general secretary of the TUC said, ‘The figures make grim reading. People raiding piggy banks is bad news for working people and the economy.’ With falling wages as living costs rise, many families are running down their savings or relying on credit cards, loans and even foodbanks to get through the month as working households struggle to make ends meet. Vince Cable said, ‘Families are increasingly unable to live within their means or save for the future. Our economy's reliance on consumer spending, propped up by debt, is not sustainable.’ Recently, Moneyfacts said that savers have had a ‘never-ending battle’ to get a decent return on their cash over the past few years, and savings rates are failing to keep pace with the rising cost of living.

Pray for education ministers as they consider reviewing the tuition fees and student loan system, after a damning report revealed that 75% of students will never fully repay the loans (which leave graduates with average debts of over £50,000). Sources close to Jo Johnson, the universities minister, said that the interest rate on loans might be reduced. She indicated that the situation was being looked at, along with a review of higher education funding as promised in the Tory manifesto. Labour education minister Lord Adonis, who originally promoted tuition fees, said that the annual £9,000 charges should be scrapped after becoming a ‘Frankenstein’s monster’. Adonis accused the government of running a ‘Ponzi scheme’ which left graduates with massive debts and the government with a black hole in public sector finances. Other critics said that the government should save money by withdrawing loans for degrees that lead to low salaries.