Debt and low income groups

Low income groups are the most vulnerable to debt problems. A life change can trigger serious debt for those already struggling to make ends meet. Circumstances can force folk to take out loans that can result in unsustainable repayments and real hardship.

Low income groups are three times more likely than the general population to be in arrears with rent, council tax, utility bills or mortgage payments. That is to say they are more likely to have priority debts where the consequence of the non payment can be the most severe. More than half of over-indebted households have an income of less than £7,500 per year.

Those on low incomes have less assets to sell and less capacity to hold savings or pay insurance premiums. The poorest in society have less access to mainstream credit facilities and pay more for the credit. they can get. This might be through higher rates from some credit providers, catalogues which hide the interest in the price, from expensive store cards and in the worst cases from loan sharks.

It is all a far cry from the laws of Israel which forbid interest to protect the poor and cancels debts every seven years to ensure that the cycle of poverty is broken and that the poor are not marginalised in society.