A new report by debt advice charity Stepchange, which gives data at constituency level for the first time, shows that more and more people in Leith are struggling to keep up with rising everyday costs and running into trouble with payday loan debts.
In 2010, 4.5% of people seeking help from the charity in the Edinburgh Northern and Leith area of the city had an average Payday Loan debt of £555. Two years later, the figures show that 13% of local folk seeking advice had a payday loan debt – the average size of which had grown to £1,134.15.
Scotland-wide the report notes that there has been a tenfold increase in the number of people seeking help with payday loan debt over the same time period.
The figures also show an increase in people struggling to pay their energy bills and a large increase in people seeking help with rent arrears. The charity notes that problems with rent arrears have increase greatly in the last six months.
Although the charity doesn’t mention the “bedroom tax” by name, it’s hard not to conclude that this will have been as a consequence of the “spare room subsidy” cuts to housing benefit that came into force on April 2013.
Sharon Bell, head of StepChange Debt Charity Scotland said: “This is the first time the charity has looked in detail at the pattern of debt in Scotland and it has revealed some startling results.
“The explosion in problem debt from payday lending, and the steady growth in numbers with priority debt arrears, is a clear indication that more and more Scottish families are finding it difficult to make any disposable income cover basic household costs.”
Meanwhile Consituency MP Mark Lazarowitcz – who did show up to vote against the Bedroom Tax in a recent Westminster debate, unlike some of his Labour party colleagues – has also been banging the drum in support of his party’s plan to freeze energy prices.
He said: “I am angry at the Government’s complacency as ordinary families and especially the elderly are faced with the worry of how they will afford to heat their homes this winter.
“Its solutions so far – competition, switching and simplification – just haven’t worked and I know that some of my constituents have even ended up paying more.
“The Government’s next trick is for green levies to be taken into general taxation – which the Scottish Government has also proposed – but without saying where the money would come from.
“I want to see a price freeze and a complete overhaul of the way the industry operates so that its priority is the customer not ever increasing profits.”
Despite this call, there’s sadly little prospect that Westminster politics will lead to any action that will help people out this winter.
2. If you are worried about heating bills, do consider switching energy providers, and call Home Energy Scotland on 0808 808 2282 to find out if you’re eligible for a grant to make your home warmer.
3. And although Greener Leith is not a financial adviser by any means, if you do want to borrow a small amount of money for a short length of time, consider this from Capital Credit Union, rather than a payday loan firm. The interest rate is considerably lower.
And lastly, if you would like to see more done to regulate payday lenders in Scotland then you could consider supporting the Debt Busters campaign led by Lothians MSP Kez Dugdale that aims for exactly this.