Scots under financial strain and using short term loans to get by each month

In the run up to Christmas, reports point to the financial struggle that the citizens of Scotland face with the basic necessities of daily life. Scotland’s debt charity organization, StepChange, reveals that a large percent of the population have difficulty paying taxes and heating their homes and they are using short term loans to help them get through the month.

In comparison to the rest of the UK, the average Scottish household that is in arrears on their council tax owes up to 1534 pounds. This is almost double the average tax debt for the rest of the UK. The average debt for arrears on council tax in the rest of the UK is 798 pounds.

Households in Scotland have much higher short term loan debt than rest of UK

Short term loans, or Payday loans, are also posing a big problem for the highlanders. StepChange reports that the average payday debt is 1438 pounds which, again, trumps the average payday debt in the rest of the country of 129 pounds. Moreover Scotland is having problems paying their electricity and gas bills. The average debt for payment of electricity stands at 616 pounds and 539 pounds for gas. The fact is that the people of Scotland are having difficulty paying for these basic necessities.

Sharon Bell who heads up the StepChange debt charity for Scotland has this to say,

“The rise in people struggling to pay their priority bills is a stark reminder of just how difficult day-to-day living has become for many Scottish households.”

The charity has observed that when bills start mounting people begin to turn to high interest loans out of desperation. Not only are people in arrears on council taxes and utility bills, but personal debt is also on the rise as desperate times call for desperate measures.

Sharon Bell explains how many families in Scotland live under the constant pressure of impending debt. Many households survive in a subsistence level economy. While many of these households are not yet in debt, they are just scraping by most of the time. Although they are able to meet their financial obligations, it is a constant worry and a small setback can easily push them over the edge and into debt.

In desperation people tend to turn to quick credit, and that is where the viscous cycle begins. Payday loans and quick high interest short term loans are just that. Short term. This kind of lending is not geared towards people who are on the edge or already in debt and don’t have the means in the foreseeable future to pay the debt off.

Sharon Bell agrees

“…we need to find more sustainable ways to help people cope.”