SCOTLAND -- Recent surveys by Citizens Advice Scotland have shown that unhelpful lenders and rising living costs will plague Scottish Citizens with financial problems throughout 2011.
Mary Kinninmonth, Manager at Citizen's Advice Bureau in Dundee, said: "I think people will face a difficult year. The recession and the credit crunch are still biting, especially as a lot of people have lost their jobs recently or are already facing debt. It is always a struggle for people to make ends meet. The cost of living has risen dramatically so it is more difficult than ever for people to get by, especially those in low-income families."
A spokesperson for Scottish Trust Deed believes 2011 will be the toughest year yet for everyone, even those who think they have suitable financial arrangements to see them through. "No-one will be immune to what is going to happen in 2011, even those who might be considered to have a comfortable lifestyle. Those in good financial positions will most likely feel the pinch in their shopping baskets and utilities bills, although their savings and investments will continue to be hit hard. Those people just about coping above the poverty line will slip down under due to a rising wave of unemployment, salary cuts, increasing interest rates and increased cost of living. Those below the poverty line will see their income and benefits fall further, pushing some of them into sequestration or having to take out Trust Deeds to avoid it." "No-one will avoid the fall-out from what is about to happen."
VAT rises, more jobs cuts planned for the public sector and festive bills have all added extra strain.
"Some people will have been managing absolutely fine with the income they had coming in and suddenly they have found themselves in a dramatically different situation," said Mary Kinninmonth. "It is difficult to tell what will happen, but when you think of all the places that have closed down this year, people will be facing a lot of difficulty."
Banks and building societies have come in for heavy criticism recently and accused of making things much worse for those whose finances are already a vulnerable state. A survey carried out in December by Citizens Advice Scotland (CAS) revealed much anger among its advisers about the persistent poor attitudes of the banks towards people who need help. CAS advisers work on the frontline, helping tens of thousands of Scottish Citizens every year with advice and guidance on everything from housing issues to consumer legalities to debt advice. Over 80% of advisers considered major offenders in the failure to help vulnerable people to be banks and other lenders, condemning them as 'aggressive', 'cavalier' and 'inflexible'.
The spokesperson also said: "It comes as no surprise to me that the banks are still behaving like this. For a while there was a brief flicker of hope that the appalling consequences of the way they mucked up the economy would result in a more ethical way of them doing business, but it seems this was a futile hope. Their idea of ethics was to charge crippling amounts of interest to people with low incomes and then tighten their lending polices draconically so that people were trapped into unaffordable credit and prevented from finding a more suitable deal elsewhere."
"Payment levels on some people's loans and credit cards have risen so much due to increased interest that once affordable payments have become impossible to keep up, leading to defaults. The lenders lose money so they increase interest rates on their products. It's a Catch-22 and the banks are yet again at the centre of the problem."
Scottish Trust Deed provides specialist advice on getting out of debt through the Protected Trust Deeds solution, which enables people to become completely debt free in 36 months.
Vincent Chudy, Manager of Glasgow Central CAB, said: "In a typical morning a CAB adviser will see someone who is so deep in debt they have to choose between heating their home or feeding their family, followed by a severely disabled person who has had their claim for benefits rejected because they've been found 'fit for work' after a brisk five-minute interview which didn't even ask about their condition.
"Then you'll perhaps see someone who has worked and paid taxes all their life only to be made redundant and be told they are a benefit cheat, followed by someone whose £1 overdraft has become several hundred pounds because of bank charges they didn't know about, or someone who is being phoned at work and at home all hours of the day and night by aggressive debt collectors from loan sharks."
