Author: Adam Heppell
Date: Monday 26th April 2021
Debt can be one of those taboo subjects difficult to raise with others, even friends and family. Those affected may be embarrassed to seek help. It is essential that this stigma is removed so that those affected feel confident to confide in others.
When these situations arise it is vital that the lender/supplier is contacted and made aware of the situation, with the intention that a more affordable option can be found. Organisations such as, Citizens Advice, debt charity StepChange and the Money Advice Service to name a few.
Impact on Home Life
The StepChange charity claims that 1.2 million people are faced with serious issues including falling behind on essential bills and using credit to make debt repayments.
Research conducted by Citizens Advice in 2020 indicates that 7.3m adults in UK households are behind on bills - 14% of the UK’s entire adult population. The pandemic has only heightened the problems faced. Subsequent lockdowns have led to income losses for a signiﬁcant number of households through furlough and redundancies. Indeed, at least one in three households have lost income due to the pandemic. One in six are behind on household bills and have been unable to aﬀord food during the pandemic.
Impact on Health
There is a clear correlation between mental health and finance. Debt can do much more than negatively affect your credit score, it can also have consequences on one’s physical and mental wellbeing. Poor mental health and low self-esteem can be linked to debt through changing spending habits. A change in social habits may also occur.
Much like harmful gambling, one can end up chasing their losses. Debt can quickly spiral out of control, starting with small manageable amounts before quickly reaching amounts that are unsustainable. Credit can encourage individuals to spend money they don’t have.
It can be easy to use credit to fund a new car or other extravagant purchase and struggle later, but more importantly, using credit to pay off other loans can be even more dangerous. The worst measure is to resort to payday loans which encourages a vicious cycle that can be difficult to break yet some are left feeling they have no other choice.
Being in financial difficulty can be very lonely and can make one feel trapped. All the more reason to seek support.
Unite's Credit Union Service has been set up using a network of existing regional credit unions. This means we can provide a local service through a credit union that is already established and you can access their services locally.
A credit union is a not-for-profit cooperative that aims to provide affordable financial services for members and their families. The members are the shareholders and the focus is to make sure that any profits are distributed back to the members and with all products the members get the best possible deal.
Our Credit Union Service is available to Unite members aged 18 and over, and family members including Junior Savers. Find out more here.
Do you want to learn more about money management? Take a look at our CPD course here.
Unite the Union and the Marx Memorial Library are creating the largest collection of Oral Histories from working people. Sharing stories of struggle, collectivism, and what it means to be a member and activist within the Trade Union Movement. Listen to the podcasts now on Spotify and Pocket Casts.
Find out how to join Unite The Union