CHRISTMAS CREDIT COULD SPELL DEBT DISASTER FOR FAMILIES

FAMILIES from the North West who turn to credit to pay for Christmas could be setting themselves up for a New Year debt disaster, children’s charity Action for Children is warning.

The fears follow a national survey from the charity and high street bank, Barclays, which found that 41% of people from northern England are at risk of borrowing more than they can afford because they don’t know the meaning of APR – a crucial factor in determining how much they will have to pay back.  The figure is higher than for anywhere else in the country apart from London, - including the East (26%) and the Midlands (31%). It is also 5% higher than the national statistic (36%).

The charity is so worried by the results that it is urging people to be more ‘Credit Clever’ when planning their festive finances. It has also launched a package of tips and guidance aimed at making people think twice before they borrow – including one which urges them to consider whether they really need the extra money at all.

Paul Moore, Action for Children’s Strategic Director of Children’s Services in the North, says:- “This survey underlines what we already knew from our work with some of the most vulnerable families in the North West – that those most likely to be tempted to take out loans at Christmas are unfortunately the least likely to know what it’s going to cost them.

It’s vital that those on the lowest incomes have all the facts at their fingertips before committing to what otherwise could be a very costly decision.”

The survey also found that while a quarter of those planning to borrow across the country this Christmas will use catalogue credit, a 5th are planning to use store cards and 1 in 7 are planning to go to doorstep lenders – 3 of the 4 most expensive sources of credit.  This compares to just 1 in 11 who say they are planning to borrow from their local Credit Union and only 1 in 17 who are applying for a loan from the Department for Work and Pensions – 2 of the cheapest sources of extra cash.  It is not surprising therefore that more than a quarter expect to still be paying off what they borrow this year by the time next Christmas comes around.

Action for Children staff and Barclays volunteers are supporting families and young people to be more Credit Clever during Financial Futures money management workshops at locations across the country, including Barrow-in-Furness.

Rachel Herbinson, Barclays Community Relations Manager for the North West, says:- “It’s clear from these poll results that there’s a real need for this kind of work and that’s why we’ve teamed up with Action for Children to give families and young people the kind of money management tips and guidance they need to stay out of debt.”

Action for Children’s tips and guidance for a Credit Clever Christmas can be viewed at actionforchildren.org.uk/creditclever.

Cash-strapped homeowners facing ‘safety crunch’

CARBON Monoxide Awareness Week was held over 17 November 2008 to 21 November 2008 and is reported to have raised awareness of the dangers of the ‘silent killer’, new research exposes a worrying side-effect of the credit crunch as households in the North West cut back on basic safety measures to save money, leaving themselves and their families at risk.  The research from leading LPG supplier, Calor, reveals that people in the North West are cutting back on vital health and safety measures as they find their disposable income plummeting. 23% admitted neglecting the condition of their car by reducing services and maintenance, 16% have held back on medical checks and prescriptions and 17% have cut down on basic household safety precautions, including alarm systems.  Of most concern is those who confessed to having cut down on servicing potentially dangerous household appliances such as boilers (33%) or gas appliances (32%) – checks that are vital to reduce the risk of carbon monoxide (CO) poisoning. In each case more than 56% said they simply couldn’t afford the checks or had other financial priorities.

Carbon monoxide poisoning kills around 40 people every year, yet sadly in most cases it could be prevented by simple appliance checks and safety measures or by installing detectors. The research showed that people in the North West are reasonably aware of the dangers of fire, with 88% having a fire alarm or smoke detector in their home, yet only 22% have a CO detector, despite the very real safety threat. While 46% admit they haven’t got round to it, the shocking news is that 9% say they simply can’t afford to buy one.  In fact, 79% of the North West would like to see a call to action for the government to remove VAT on carbon monoxide detectors, with 70% saying the government has a responsibility to provide financial help so that those struggling to make ends meet do not have to compromise on safety.

Simon Maris, communications manager at Calor, comments:- “We already knew that there was a worrying lack of action in homes across the country when it comes to protecting against carbon monoxide poisoning, which is why Carbon Monoxide Awareness Week is such a vital campaign. However it now seems that money, or lack of it,  may actually be the real problem.   In difficult financial times people look for ways to save the pennies, however safety measures such as boiler or appliance services should never be considered non-essential and in the case of CO, which has no visible symptoms, they are the only way to detect the danger from this deadly gas.”

The number of cases of carbon monoxide poisoning is much higher during the winter months as households turn on gas appliances that have been unused during the summer. It is vital that people start checking their heating systems and portable gas heaters before they start using them as the cold weather kicks in.  Carbon monoxide is an invisible gas that you cannot smell, taste or see and symptoms such as dizziness and headaches are often misdiagnosed as flu, so appliance servicing is the only way to flag up faulty equipment that could cause dangerously high levels of the toxic gas.