One in seven adults have less than £20 a month to live on, says survey
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ONE in seven Scottish adults has less than £20 a month to live on after paying for essentials, a new survey has revealed.
New YouGov polling by StepChange Debt Charity has reveals the dire state of households finances, with people imminently facing higher council tax, less support with energy bills and higher rent or mortgage payments.
The UK-wide representative survey examines the toll that the cost of living crisis has had on household incomes. It reveals that among the 190 Scottish adults included in the poll, one in seven (14 per cent), equivalent to over 600,000 people, has £20 or less left over each month after paying for essentials, with seven per cent having no disposable income at all. This chimes with StepChange Scotland’s own client data which shows over a quarter (27 per cent) of clients are in a negative budget, meaning that, after a debt advice session and budget counselling, their expenses exceed their income.
The polling also reveals the impact of nine consecutive interest rate rises on mortgage holders and renters alike, almost two thirds (60 per cent) of whom expect their housing payments to rise within the next 12 months.
Almost two in five (38 per cent) Scottish adults say they will have to borrow to cope with the end of the £400 Energy Bill Support Scheme (EBSS) discount, while almost one fifth (18 per cent) think they’ll be driven into problem debt due to the discount ending.
The polling also showed that almost one in six (15 per cent) Scottish adults do not know debt advice services even exist, and a further one in five (22 per cent) wrongly believe that contacting a debt advice organisation would have a negative impact on their credit score.
The charity is calling for the Scottish and UK governments to take action which will prevent households from falling into problem debt and then remaining trapped in a long term debt spiral. This would involve welfare payments keeping up with inflation and making sure there is targeted support for households who face higher financial barriers. This must include ensuring a fairer approach to enforcement action, especially with energy debt, with the write off of arrears where an individual cannot afford to pay.
Sharon Bell, Head of StepChange Debt Charity Scotland, said: “These figures also reveal that it’s not just energy bills that are decimating household budgets, with most renters and mortgage holders now facing a rise in housing payments over the next 12 months.
"More than a year on from the start of the cost of living crisis, financial resilience is clearly very low – too many people are left with little to nothing each month after covering their basic living costs.
“The Scottish and UK governments must commit to longer term solutions which will protect financially vulnerable households from worsening debt and destitution due to circumstances outside of their control.
“It’s vital that people know free and impartial debt advice exists, and aren’t put off by any misunderstandings around what happens when you seek help with problem debt.”
To get started on the journey out of debt, visit www.stepchange.org to find out how the charity can best help you, and download the free guide to dealing with debt in Scotland. From budgeting tips, to information on benefits and StepChange’s online debt advice tool, there is a wealth of information on how to start on the path to becoming debt free.
