debtsupporttrust

Our debt advice team will be taking a well earned break over the festive period and as such our advice centre will be closed.

We’ve listed our opening hours below should you wish to get in touch.

Festive opening hours

Our opening hours between Christmas and New Year will be

Friday 22nd December – 8am – 12pm

Saturday 23rd – Tuesday 26th December – Closed

Wedneday 27th, Thursday 28th and Friday 29th December – 10am – 4pm

Saturday 30th – Tuesday 2nd January – Closed

We will return to normal support hours from Wednesday 3rd January where we will be open 8am to 7pm.

You can still use our website for information on debt and try our debt analyser which will give you a guide to which debt solutions you may be suitable for.

We wish you a very Merry Christmas and a happy New Year.

As part of a UK-wide investigation, the provider researched the cost of nursery fees around Britain, assessing average childcare bills against mortgage payments and salaries in 13 cities. The results show that parents are paying a significant portion of their earnings towards childcare – in some cases up to 55% of one person’s salary.

Parents in Glasgow are paying the least for childcare, with a full-time place for a child under two coming in at an average of £799 a month. This is followed by Liverpool at an average of £860 per month and Plymouth at £884. London is the most expensive, with average fees an eye-watering £1,383 per month, almost £600 dearer than Glasgow. Meanwhile, average childcare fees in Bristol tot up to £1,142 and Southampton to £1,050 making them the second and third most expensive cities, the research found.

The investigation also found that a parent could be spending between 41% and 56% of their net wages covering childcare costs, leaving them an average of £1117 a month* to cover mortgage or rent, council tax and household bills, groceries, transport and other costs associated with raising a child.

It means that for couples who are both going out to work, more than a quarter of their joint income might need to be set aside each month for childcare. For single parents, more than half of their earnings could be lost before they’ve even begun to pay for necessities and other bills.

The breakdown: Where do parents pay the most childcare in relation to their salary?

In 6 of the 13 cities – Manchester, Birmingham, Plymouth, Liverpool, Nottingham and Glasgow – monthly childcare bills were found to be higher than average mortgage payments. The price of an average house in each city** was used to calculate monthly payments, based on a 25-year term, with 95% loan-to-value.***

And in London, Cambridge, Southampton, Bristol and Newcastle, an average worker would not earn enough to cover both full-time nursery costs for one child and average mortgage payments. This means families, particularly those with single parents, could be at risk of falling into debt if they want to continue with their careers past parenthood, or else be forced to stay at home because it is not financially viable.

Mortgage + childcare – how much is left?

And for those who want to expand their family, putting two children into full-time nursery would mean a parent on an average salary would have, at best, £400 a month after paying for childcare bills.

Two children in childcare – the costs

Scott Cargill, UK CEO of Admiral Loans, said: “Our research shows the cost of childcare can be a huge burden on new families. Parents who have taken maternity or paternity leave may already be under financial pressure after being on a lower income during their time out of the workplace and may be squeezed even more when the cost of childcare kicks in.

“New parents have a lot of additional costs to consider. For families already on a tight budget, anything that pushes their spending further, such as holidays, Christmas or birthdays, can tempt people into looking for ways to ease the strain.

“Payday and short-term loans that alleviate immediate financial stress can seem like a quick fix, but can make life more difficult in the long term. Parents considering taking out a loan should think carefully about all the options available to them and even whether a loan is right for their financial circumstances. Being clear on the interest rates and ensuring loan repayments are sustainable, is key to ensuring hard-working families don’t fall into a financial trap they can’t escape from.”

Stuart Carmichael, of the Debt Support Trust said: “Many families face a financial dilemma after a child is born and it’s a problem which needs to be addressed. While efforts have been made to make it more affordable for parents to return to work after the birth of a child, for low income families, the financial benefit can be very limited.

“We are concerned that more people could be turning to high interest, short-term loans to bridge financial gaps, which are a temporary solution at best and could lead to additional stress and worry further down the line.

“For those struggling with the costs of raising a family, there is help out there and we would urge people to get in touch with us for advice before they feel they have to turn to desperate measures, which may make the situation worse in the long term.”

Admiral Loans have developed a cost of childcare tool to help families plan ahead: www.admiral.com/childcare

Tips to help ease the stress of the cost of childcare:

• Consider childcare voucher schemes – many employers offer this and it can reduce the cost of childcare, with the bill coming directly out of your salary. The government has also launched tax-free childcare for children under 4.
• Ask family to help with childcare – an increasing number of grandparents are looking after their grandchildren to help ease the burden of childcare costs. They may also be able to get contributions towards their National Insurance.
• Do your research – looking into other childcare options, such as a nanny shared between a group of you, or a childminder, might provide cheaper options. Ultimately it needs to be a place you are comfortable leaving your child, but make sure you factor in all costs so you can make an informed choice.
• If you are concerned about getting charged late pick-up fees from nursery, speak to your employer before returning to work to see if flexible hours would be an option. You have the right, by law, to ask for this.
• Discuss budgets before planning a family so there are no unexpected surprises that you haven’t planned for.
• Avoid taking on extra debt that you can’t keep up repayments on. It can be easy to go for quick fixes, but ultimately, they could put you under more pressure further down the line. Think about whether you can afford the repayments and whether it is the most cost-effective solution.
• Seek advice. Charities such as the Debt Support Trust offer practical solutions to people who are feeling the pinch.

Almost 20% of people contacting Debt Support Trust in the last month tried to get a consolidation loan first, however their loan applications were rejected.

When you apply for a loan often a footprint is left on your credit file to show that an application has been made. When you’re rejected then apply elsewhere this footprint is visible and can make being accepted even tougher.

In society, credit is considered to be good (typically) and debt bad. Which is why you may decide the consolidation loan route is the best option. So, what are the next steps if you are rejected for a loan?

Consolidate Debts with One Loan

Before the credit crunch, consolidation loans were relatively easy to access and certainly easier to be accepted for than in today’s financial climate. For many people, their plan to consolidate debt is a good one, especially when they’re paying high interest on existing debts.

Some financial institutions will advertise rates for consolidating debts into an easily repayable loan, but it’s often not as straight forward to be accepted. The criteria, often affordability, is the one area which means people are rejected for a loan.

Steven from Manchester told us “I have 6 debts totalling £14,000 and the interest rates are high. I’m paying over £700 each month and I don’t see the debts going down. I applied for a loan which would have made my payments more affordable each month and I would have been debt free in 4 years, but I was rejected”.

It’s frustrating being rejected for a loan, but often it’s the lenders policies which determine if they are willing to take the risk and lend. At Debt Support Trust we’re certainly helping more people unable to obtain a loan to deal with their problematic debts.

Loan Rejecting: What’s Next?

After being rejected for a loan there are a number of things you can do. The first is to check your credit file. Is there any inaccurate information on your credit file which could improve your chances of being accepted? You could also ask the lender why you were rejected.

Is another loan the correct answer and would it be affordable to repay even in the toughest months, like birthdays and Christmas?  Often another form of credit prolongs a debt problem but doesn’t actually resolve the issue.

If you’re struggling with debt then why not complete a statement of affairs with Debt Support Trust? This is where we look at your income, expenditure, disposable income, assets and level of debt. You’ll then be able to see how much you can realistically afford to repay towards unsecured debts each month. Our advisers will offer you every scenario, along with the positives and negatives, to resolve the debts so that you’re empowered to make an informed decision about your financial future.

A loan to consolidate debts could be your best option or your unsecured debts may best be rectified with a debt solution. Speaking to a debt adviser at Debt Support Trust will help you better grasp your debts and understand which options you have.

Do you know what surprised me most when I started paying off my rather large amount of debt?

Most of what I read – websites, blogs and books – abounded in truisms like ‘don’t spend more than you earn’, minute technicalities of saving and/or righteous judgement. Some of that was useful, some of it was not worth more than a second’s look. What I read, offered information but not the wisdom and understanding that I needed to pay off my debt.

The wisdom necessary to pay off our debt, and stay debt free, I had to figure out. Here I’d share 7 important things about debt that personal finance experts won’t tell you.

Before we move on, let me tell you a bit about me.

I’m Maria; I blog on personal finance and I’m professor at two universities. I have written two PhD theses and have initiated in research many generations of students. Smart, uh?

I also had £100,000 of consumer debt at the beginning of 2010. You see, you can get yourself in debt irrespective of education, background, occupation, gender…Shall, I continue?

The key point is that anyone can get themselves in debt. As with many things in life, getting in debt is not what matters; what you do next is what counts.

What did I do, you may ask?

I got fed up and I got determined. I learned a lot of what there is to know about money: about how to make it, keep it, spend it and invest it. This all paid off. Three years later, at the beginning of 2013, we had paid off all our debt. Now we have serious savings and investments.

The 7 important things about debt I share here, didn’t come from bookish learning: they were suffered and tested through experience.

#1. Having debt is like stealing from your future self

Some people tell me that they have debt but they are not bothered about paying it off. Some people were also very negative when the news that I paid off £100,000 worth of consumer debt in three years; some muttered that I should have gone bankrupt.

You know what?

These people must realise that staying in debt is like stealing from your future self. Why would you want to do that?

#2. Paying off your debt is very empowering

After you’ve just realised how much debt you have, the way to debt freedom looks like a climb to the summit of Everest: long, cold, hard and very daunting.

Don’t feel disheartened. Just start paying your debt off. Very soon you’ll see results and this is so empowering.

When we paid off over £70,000 in two years, I started feeling like Rambo: nothing seemed impossible and sky was the limit.

And you know what? I hustled like a pro! You can feel my elation in my announcement that we are debt free.

#3. Not everyone can pay off their debt

Personal finance experts, particularly bloggers, will try to motivate you by telling you that everyone can pay off their debt.

This is not true. To decide whether you can pay off your debt, use The Money Principle ‘debt repayment coefficient’ or DRC. This is:

DRC = (Annual Pay After Tax – Annual Survival Budget)/total debt

If your DRC is larger than 0.18 you can’t pay off your debt and need to seek professional help. (I’m assuming you know or can work out your Annual Survival Budget but let me give you a hint: this is the spending that you need for your survival and not much less. Still, your survival budget can be surprisingly large.)

I’m not a spoil sport and I’m not here to burst your bubble. I’ll motivate you by saying that if you find your DRC is high, you can start learning how to make more money. It’s all splendid fun.

#4. Most people are in debt because they don’t earn enough

This is certainly something you won’t hear often from personal finance bloggers. They’d rather tell you how to save more and be frugal to the extreme.

The problem with frugality is that it can be very dangerous when extreme. Yes, you can cut your food budget but this often means inadequate nutrition and limited capacity to do much else than make designs on how to be more frugal. Yes, our minds are limited as well.

Yet, when you look at statistics the median gross household income in the UK (2 adults) is approximately £22,000 (this is before tax) and the basic cost of living per person is approximately £15,000 per person. Can you see the problem? It is not surprising that 60% of the people in the UK who live below the poverty line work, is it?

Make sure that you earn enough before you start making plans to pay off your debt.

#5. Habits are the key to debt

When talking about debt we usually talk about money. So, people tell you that you are in debt because you spend more than you earn.

This is technically correct but rather misguided. You are in debt because you:

• Don’t balance your current account regularly;
• Don’t control your spending;
• Don’t spend mindfully;
• Buy quantity rather than quality; etc.

To put it bluntly, you are in debt because of your habits. To get out of debt, and to stay debt free, you need to change your habits.

#6. To pay off your debt you need focus not money

“Ah, Maria, but of course I need money to pay off my debt.”

Money is secondary, friends. You can spend your money on any number of things. To spend it on paying off your debt you should develop the focus of a hunter. You must stalk your debt, chase it and hit it until it is all gone. All of it!

You wish to know what I mean?

When we were paying off our debt, the smallest payment we made was slightly over £4. This, my friends, is the focus of hunting tiger.

#7. Having debt makes you very vulnerable

Most people would rather judge when they talk about debt. I’ve always been practical (and I never allowed anyone to judge me).

I wasn’t ashamed of having debt – after all, this is the norm and our capitalist societies thrive on debt. No, what really made me mad, so mad that I didn’t stop until the last penny was paid off, was that having debt made me very vulnerable.

The bank could have taken our house.

My employer had a big trump card over me: I needed the job.

My choices were severely limited.

If I were to encourage one emotion when dealing with debt it would be the craving for independence and security. Because they feel great and you cannot have them when you have debt.

Finally…

Becoming debt free is the best thing I ever did apart from giving birth to my son. It wasn’t easy. It took determination, ingenuity, extremely hard work, learning new skills and repeatedly leaving the safety of comfort zone.

I don’t regret a second of it. Paying off my debt is one of the most empowering periods of my life. It taught me that I can face anything in life and can not only survive but thrive. It taught me to adapt, learn and grow.

Best of all, it was so worth it. People are right when they say that the ones who earn interest sleep better than the ones who pay it.

How has your sleep been?

—-

Author’s bio: Maria Nedeva is the founder of The Money Principle where she teaches people in financial trouble how to build sustainable wealth. You can follow Maria’s work on Facebook and Twitter.

British consumers are worried about the effects Brexit could have on their personal finances, including their level of debt.

A new survey by Mintel has found 83% of Brits believe prices of goods and services will increase due to the UK leaving the European Union.

Almost half of those surveyed (46%) said they believe the UK leaving the EU will have a negative impact on the cost of living.

37% said they are worried about their level of debt, while 48% are concerned about how they will manage to pay bills.

Jack Duckett, at Mintel, said: “Mintel research underlines particular concern about the rising cost of in-home food, and inflation is undoubtedly going to squeeze household budgets.

Although, there was a positive result from the poll, 31% of people believe Brexit will have a negative impact on the economy, which is down from 39% in July last year.

Dealing with Debt Post Brexit

There’s still a lot to be negotiated between the UK and European Union, making it difficult to understand the full effect Brexit will have on the UK economy.

Debt solutions will likely remain the same, or at least not change due to Brexit, because these are already regulated and operated within the UK.

Whether Brexit has a negative impact on personal finances or not it’s important people who are struggling financially seek advice.

Dealing with Debt Before Brexit

Anyone who is concerned about their finances in a post-Brexit UK should seek immediate debt advice before the transition is finalised.

There is around two years to go before the UK finally leaves the EU and this time can be used to deal with debts and prepare household finances.

If you or anyone you know requires debt advice they can speak to Debt Support Trust on 0800 085 0226.