Broke: Britain's Debt Emergency | Dispatches | Channel 4 Documentaries

tell you which Manchester advice on your speaking to ashes is it the first time you call regarding the issue the UK is in the grip of a cost of living crisis I've got a massive hike in energy bills I had one pound 50 in my hands where am I gonna get a lecture from you've done the right thing in the last six months one in four people borrowed money to pay for food and energy bills I can't pay anything because all the money is counted for bills and I'm living on food banks at the moment a lot of people are relying on their their overdrafts and their credit cards you know to just you know meet their their monthly outgoings it feels less like debt management at the minute and more like Crisis management with costs continuing to rise many are finding themselves in debt for the first time I borrowed 500 pounds and they want 1800 pound back of me I have no gas no electric I literally don't have money to live with exclusive access to Citizens advice and the clients that they're working with this is the story of the UK's emerging debt crisis told by the people behind the headlines they could consider using bailiff keep your doors locked and keep the bailiffs out [Music] UK households are experiencing the largest collapse in living standards since records began and it's predicted one in five people will be in poverty by next year [Music] citizens advice is the largest independent free advice provider in the UK its caseworkers are currently helping two people every minute with Crisis Support I've got a client coming in it's Carly which is a single parent age 34 she's got two daughters age 7 and 15 living in the local area she'd like advice and options about how to actually deal with her debts come through lovely thank you this is Carly's first visit to seek help she owes twenty thousand pounds after taking out a series of loans over the last 12 months and is struggling to pay for her everyday expenses understand that you've come in for a food voucher is that right so if I can just ask you some questions yeah how many of you are in the house me and my two daughters so I understand that you've dropped your working hours well I dropped because of my um my personal situation like the last two years I've gone through a lot of loss like I lost my mum and my dad my stepdad my brother I'm sorry to hear that that's tough and like my mental health is taking a bit of a bashing I was used to working 30 plus hours right um a week so then a month I would clear like 15 1600 and then this month I got like 700. so it's a big yeah drop you just need some breaking stuff yeah so what I would like to do now Carly is to issue you with food bank voucher have you ever been to the food bank before okay let's do this before there's no shame there's absolutely no no absolutely not times are really hard for everybody and you know where we are thank you I've never been in a situation where I'm worrying about food of all things food it's quite scary I think I've got about 43p in the bank so yeah we're seeing more football here we're seeing more clients I've never known it's been so busy with clients coming and asking for support financial support and asking for food vouchers [Music] oh there you are yeah back home Carly reflects on the period when she began taking out loans when like I applied for loans is it is really easy just Google search loans and then you can see like um you've got loans for bad credit uh Loans To Go loans near me for example loans to go I got one with them and I borrowed 500 pounds and they want 1800 pound back of me so the interest rate on that was crazy the interest rate on the money Carly borrowed from Loans To Go was a hundred and eighty percent per year you're not really thinking about the consequences either like you're just thinking of the now like the money to get food whatever electric guests yeah looks 770 APR is loans to go that's just crazy how quickly did it come through for you literally I think it's like literally within a minute they can come back going yes congratulations like you've been approved money will be paid in within the hour people are always going to be reliant on credit when they run out of money they just end up in a vicious cycle where the debt has it you know it just is just astronomical compared to what they've borrowed in the first place it's a huge worry for debt advisors we are going to see situations where people are going to get more and more desperate Debbie has worked at citizens advice for 11 years and manages a team of 30 case workers I've worked on both the national team and the local team and it's the same across the country this feels like one of the worst periods of of times for advice workers and particularly when it comes to debt [Music] there were people out there that would still lend me money I wish I didn't I really wish I didn't and that they'd done more thorough checks um because I'm sure I'm not the only one but there's probably thousands of people out there in the same situation [Music] so can I get you to just confirm the first line of your address your postcode 235 miles away in the Manchester citizens advice office staff are receiving 250 calls a day to their helpline [Music] okay I'll have nothing in the fridge at all my electric gives down to two pounds I need to get myself out of this situation this is the first step for many and when advisors get to grips with the immediate issue hello my name is Paulo okay and Paulo how can I help you today the situation is I had bailiffs knocking on my door two weeks ago they tried to take all my son's birthday presents Christmas presents okay I can definitely help you out with that do you know what the dots are one is for council tax they've demanded that I pay this money within two months I can't afford it and I don't know what to do thinking oh the Bailey's are going to come I'm I'm nervous you know it's okay it's okay I thought you're tagging the right chapter running someone here [Music] a week later Paulo is still living with the threat of bailiffs turning up on his doorstep oh we'll have pepperoni yes I want to put the setting put that on to about gauge one so Kara to Rodrigo his nine-year-old son we've got the pizza on top of there he's one of an increasing number of people for whom the cost of living crisis is making it harder to get by and who are being plunged deeper into existing debt the very least I even looked through the curtains I'm constantly curtains and twitching and seeing who's outside and I've even had to put a board up there Paulo gave up his hotel job four years ago to look after his son full time his only income is Universal Credit and child benefit amounting to around 600 pounds a month Paulo owes thousands of pounds in council tax arrears utility bills and unpaid fines a bailiff is someone that walks into the house and demanding for money and taking all stuff and they'll say oh we can take that because the government says it makes you feel sad and depressed all these bills and council tax and all that where to start trying to keep on track of it all it's just physically impossible [Applause] utility bills and you can't afford to pay it because you haven't got the money you're doing the resources it's just mounted up and mounted up and mounted up Paulo's debts have been sold on to different debt collection agencies he is now being chased by multiple lenders and is confused as to who he owes money to you can't survive that's the fear I have you know being a single dad oh hello yeah 557 pounds on Universal Credit and by the times you've paid bills it leaves you with nothing and start failing him and that's the stress I'm going under at the moment I'm sorry it's too much sorry about that [Music] I did a lot of the grave in University I wanted to work in the social sort of Justice side of things I chose to work for Citizens advice basically to help people look at their financial situation but it's becoming harder to find solutions for people Paulo's income is he's on basic Universal Credit so that's roughly about 600 pound and that's 600 pounds for the month which incorporates obviously his gas and electricity which is going to be raising and incorporates his council tax incorporates his groceries those that repayments need to be paid out of that so it's really just not enough to to live on new data from citizens advice reveals that nearly half of their debt assessment clients across the UK are unable to pay their council tax bills with 48 of clients in the Northwest owing on average 1 700 pounds to the local Authority two weeks after Paulo's first call to Citizens advice he's overwhelmed with more demanding letters as a first step ruri has advised Paulo to call the council directly about his repayments and to ask whether they're sending bailiffs to his door [Music] I could lose my house you need to speak to them because they're the ones who are sending the bailiffs around you are currently positioned six in the queue [Music] [Applause] [Music] good morning can I give you my account number no through to the main menu [Music] I'll have I come through to the right person no cancel that consumption one and then option b [Music] ucks today I just don't want the bailiffs knocking on my door you know and I'm having to worry after an hour and a half on the phone to the council Paulo is none the wiser about which of his debts have led to visits from the bailiffs I had to go from here [Music] I just don't know what to do anymore and I'm just petrified the increase in the cost of living is excellent cost of living Rises sharply with food and energy prices set to go even higher prices are rising faster than at any time in the last 40 years as families struggle to cope with the cost of living crisis it's believed that one million people are now borrowing money from illegal loan sharks this is a 233 increase from previous estimates the most dangerous part of of debt is when people go to Illegal money lenders an investigation unit called the illegal money lending team is dedicated to tracking down Loan Sharks across the UK they're on their way to arrest two suspects in the Northeast there is often threats of violence to your family people associated with you when people have nowhere else to go then this will increase definitely it's really difficult to know where illegal money lenders are quite often people won't admit it when people have nowhere else to go and they can't get any support it's a huge worry for everyone really because I I actually don't know what's going to happen recent data shows that by far the main reason people borrowed from a loan shark was to cover everyday living costs and it's predicted that thousands more will start turning to high-risk lenders my electric it was down to two pounds do you remember roughly when production is that right hello you're through some Manchester Advice Line can I just take your name I was about to help in the thighs because I am so glad so I'm just gonna get a bit of background from you so who are you currently living with you're living on your own with family friends I'm you know how much do you make at the end of the month 700 pounds um do you want to leave that yeah council tax and Gas Electric I feel like I'm not getting a break from anywhere we'll we'll see what we can do for you [Music] three miles away from the Manchester citizens advice office lives 28 year old matina to make ends meet she works as many hours as she can alongside studying for a degree in criminology and psychology I have a lot of sugar I have about six sugars because they don't eat a lot I tried to keep my sugars up so having a lot of sugars in my coffee is one of the ways to try to do that I know it's now very healthy those you up matina found herself unable to cover her living costs last year she's accumulated a debt of over five thousand pounds in energy bills rent and council tax arrears she earns just over 700 pounds a month working night shifts at a local supermarket and let's go and we're up to turn all the lights up when a first left school I was so determined to work hard and get to a good place financially by the age of 30. I'm working so many hours I'm studying so many hours [Music] I worked till between four and six in the morning I've been your soul used to being on the goal is this island now [Music] these are all my council tax arrays that seem to be multiplied in by the amount I first got behind on my council tax because they had a work injury last year and I was out of work for nine months so that's how I wasn't able to pay me council tax bill so it started with a warning and then now from there it's gone to attachment to earnings 70 pounds is being deducted from matina's 760 pound monthly wages as part of an attachment of earnings order that's been imposed on her by the council another step that a creditor can take is rather than instructing bailiffs they can get an attachment order which is a way of um taking money from your wages it's when the council tax do that as a collection process and it can be substantial and unexpected you can get some councils that be more aggressive than others essentially this needs to be some kind of communication so people know rather than it happening so quickly where they suddenly find out they're in a situation where they've got an attachment to their earnings so this is my gas electric meter balance which shows I have no gas no electric but it's not updated yet as of yesterday it said he had 61p which is now about minus 160. I literally don't have money to live are you having to cut back um there's nothing else to cut back on because you don't get enough to spend anyway you know like you're already struggling to pay bills foreign despite the energy price cap announced by the government earlier this month over 60 percent of us could be living in fuel poverty by next April with over 65 percent of those living in the northwest foreign how can I help today it's unlikely that they would turn up at the property but if they did you should just ask them to leave do you remember roughly when you took the Loon out hi everyone okay so we're just in Manchester Debbie arranges regular meetings to check in with the debt advice team during this emerging crisis have you found there's been much changes with people according to you at the moment you know we know that things have been deteriorating yeah cost of living wise it feels less like debt management at the minute and more like Crisis management it's beyond our Powers isn't it it's just beyond our powers at the moment and it feels that we are at that desperate point is Crisis anyone on the virtual lot over there I'm finding more and more clients are in just impossible situations really and having that difficult conversation on almost a daily basis we are homeowners people who work people who have never really been in debt and alive in a situation now where there's no other spending on the budget they've got huge debts but they've got no available income to put towards it and the only thing we can really offer is like we found vouchers but then is there going to be any food in the food banks that's the other issue if everyone's going what do we do I've got a client at the moment Martina who's a student she's working nights doing everything she possibly can and this client doesn't even have enough money to put credit on a phone to even contact to creditors I'm struggling to advise her and how old is she 28 years yeah so you know can't do anything can't socialize can't yeah exactly yeah for a client um like matina it's only going to get worse [Music] [Music] Carly lives in temporary accommodation with her two daughters in South End since her visit to Citizens advice she's been going to the food bank on her estate I never see myself like this ever worrying about you know have I got enough food to make it like to the weekend or to you know for until I've got my next lot of money coming in and at the moment the answer is no no yeah it's uh Carly um is [Music] um [Music] it is yeah have you got like a wallet and probably yeah bolognese sauce thank you I'll try to think if those slices weren't available what people would have to do thank you following a number of family bereavements Carly's job as a deputy manager of a local supermarket became difficult to maintain and at the end of last year her debts began to get out of control the first I wanted to get a loan to consolidate all the debt but no one would no one would give me a loan which I don't blame him and um but they knew like that's how I got into the Iva Carly has recently entered an individual voluntary Arrangement known as an Iva to clear this debt an Iva is a legally binding agreement between an individual and their creditors where debt is Consolidated into one monthly payment for around five years however a quarter of ivas fail within this time because people don't keep up with their repayments ivas have been an issue for a few years now purely because they get quite big fees out of it I wasn't they organize a monthly payment with the creditors that that will form a lump sum towards the debt but ostensibly their fees are within that as well we are seeing a lot more clients with ivas that probably couldn't even afford them in the first place but definitely can't afford them now [Music] Carly's been paying into her Iva for three months and since entering the agreement she's found herself unable to keep up with the hundred pound monthly repayments so this is my IBA pack it lists like all my creditors on there what I owe them and the total is 20 759 pounds I just like Googled I clicked on it I think and then it asked you some questions and then I just I don't just ended up on their web like the website um I entered my number I didn't someone rang me and it just went from there it's just one monthly payment they do what they do with it I don't care [Applause] costs of like what the cost of living like it it's not easy like seeing it like I've realized it's not as easy as um I thought it would be I do sometimes worry about my mum's like mental like State and that but I um I'm always on her about that as well though I'll I'll always like randomly behind the front room and be like are you okay yeah I'll be like are you sure despite the obligation to repay Carly's anxiety and depression has meant that she's reduced her working hours and it's compounding the financial pressure she finds herself in her Mental Health I can't control that I know I can't but I want to make sure it can be as good as possible and yeah it's just that is a worry of mine I can't keep running away from me it's not going to go away like all this money that I owe like in deep what we're thinking it's three weeks since matina first contacted citizens advice but she's falling behind with her rent and is now threatened with eviction what's your name is visiting her debt advisor Jen to discuss her options to meet you yeah thank you obviously the the main thing at the moment is this eviction notice my advice would be stay in the property but if you are getting letters about court dates and hearings then let us know you definitely don't want to do um don't really forward or give bankrupts there okay I know it's it's overwhelming just because like I want to be able to have a business and get a mortgage and all those things in the future an adult one anything to you know like block my chances of doing anything in the future when a client gets an eviction notice it is one of the most urgent things that we deal with there's a risk that a client could be left homeless [Music] I'm concerned about what what potentially could happen I can see similarities with Martina and myself Mateen is extremely motivated she's a single person and she was affected a lot by the increases in the cost of living there's no guarantee that her house Association will agree to ahold on her eviction and she might have to look at insolvency in the future that might be and you know the only way of getting a fresh start the bank of England is predicting that the UK will fall into recession by the end of December and remain there for the whole of next year the chancellor of the ex-jacker will set out the expected costs later this month [Music] I recognize that people are struggling we are taking action to help people on the lowest incomes love you love you bye despite the government's recent promise to support those in crisis citizens advice staff are finding it difficult to keep up with demand if you're in a deficit budget like we are now and the application potentially will be refused you see the moment it's showing that one 110 pounds 50 deficit that's what we would advise you to do is stop making any payments towards the debt because it's potentially just going to be increasing your financial hardship we divide debts into priority and non-priority deaths I don't dispute what you're saying we don't want this escalated more than it has done so already foreign [Music] and the advisors are having a catch up to share their case loads I found it quite difficult to tell people to you know go through the deposit and go where you can call on this this and this but reality they're not spand and you know quite a lot I just find those conversations can be a bit difficult yeah it's difficult enough telling someone to cut their spelling when there's hardly anything there never mind when there's a deficit and the advisors in Manchester are concerned where this will lead for their callers house I mean the fact that we're still using bailiffs that we're employed by us we use the Antiquated system in itself just amazes me and that needs to stop completely you know it's not all right to send people around to your house in terms of bailiffs it can be very confusing for clouds companies can pay dads and then sell it to another that collection company most of the time if you look through the documents if it's been passed through one then pass through another it won't tear who the original crowd there is and that can lead to a lot of confusion [Music] in terms of like part of that situation it doesn't know you know the difference between what that is what whereas come from and what the next steps are foreign [Music] it's seven o'clock in the evening and Paulo receives a call from a bailiff so I've already contacted citizens advice the thing is half of it it's not even mine it's my son's he can't really take something which is my song wake up I can't say anything because all the money is accounted for bills and that money literally goes I'm living on food banks at the moment [Music] Paolo who's thousands of pounds in debt and struggling to make ends meet receives the second call that evening from the bailiff foreign they're trying to settle a debt for an unpaid fine dating back to last year [Music] [Music] 100 pound a month but that's that's not that that's doable right fantastic having agreed to pay back a hundred pounds a month Paulo is hoping his Universal Credit will stretch that far [Music] we don't have to worry who is outside because we were a bit worried yesterday weren't we yeah I think it's made us have a better piece of mind isn't it I'm not having them taking my son's stuff not fair on him is it it is is it's not his fault Carly has so far made four debt repayments into her Iva lift going down but with her changing circumstances she's having second thoughts about whether she can afford the arrangement she's visiting citizens advice to discuss her options how are you yeah not too bad thank you cheers I'm doubting now that I've done the right thing okay um I just Googled help um and what came up was well the first thing that came up I kind of clicked on it which was an IBA an Iva is very rarely recommended could I cancel my Iva you are where you are with the Iva if you want to actually resolve the issue or tell them that you've had a change of circumstances so that you can no longer afford to pay your debts it's the discussion that you need to have with them because if it's affecting you there's nothing worse than that you're struggling to continue to make a payment whatever happens today whatever comes out of all of this please come back to the citizens advice if you need more advice and beat yourself up I wish you'd come and see us yeah [Music] I didn't do enough research when I was seeking that help for my debts I just kind of Googled and the first thing that came up I went for it it's kind of scared me a bit and I'm kind of kicking myself [Music] it's not easy like seeing like your parents go through hard times everything kind of just went downhill [Music] next year I just want to be smart about the things that we do kind of thing like financially as well like be smart because I I like to sit there and like kind of plan out in my head how like my mom should spend her money not that she listens to it we asked the loan company that Carly originally used loans to go for a comment but they didn't provide a response [Music] it's been two weeks since Martinez meeting with the advisor she's acted on guidance to contact her creditors to ask for help her eviction notice is now on hold [Music] but her attachment of earnings order is still hanging over her and she's calling the council to ask if they will reduce her repayments I just wanted to speak to somebody about my castle tax because I've got an attachment to earnings I'm really concerned as it's already putting me in hardship foreign because they're coming out how long do you think the attachment to earnings is going to carry on for eign thank you next vehicle bye well that went just as if I was going to go like they tell you to contact him and to let them know if you're in a situation or you need help are you struggling but when you do they're not helpful so why would you want to people rather suffer on their own because that's all you can do [Music] Manchester City Council told us their residents are facing unprecedented hardship and an attachment of earnings order is only actioned when other arrangements have not been sustained they say they have had limited contact from Martina and requested that she write to them in order for them to consider how they help her they have had no record of her doing so to date the start of the new school term and Paulo is getting Rodrigo ready for his first day back we'll get ready for school that get you dressed good day today excited yeah oh kind of oh [Music] lost the head there we go Paulo's debt repayments to one bailiff has provided some respite but he's had to make further cutbacks [Music] other bailiffs continue to visit his home Paulo still doesn't know where they're coming from a few days ago they were out the door at a lot a late night and they were banging on the window [Music] they didn't say anything they'll just knocking on the door and banging on the window [Music] the main fear is that the Rodrigo has everything that the same same opportunities what other children have in school I need to do the strips let me do the straps [Music] it's stressful because I don't want him going into school thinking that he hasn't got anything I've had to put him in his old school uniform but you have to do things to survive you see see you later have a good day at school [Music] [Music] I have never seen it this bad this will have ongoing effects for many years to come it just feel like we've got something bad ahead of us and we need to support each other yeah we can carry on advising people but it might get to the stage where it becomes pointless I don't think things have hit as much as they will we feel I feel lost there are times when I genuinely think there is nothing that we can do to help apart from put that sticking plaster on give them a Food Bank referral and get them an energy voucher we can't just carry on doing that we there isn't enough funding for that what do we do [Music] foreign [Music] [Music] foreign [Music] [Music]

Channel: Channel 4 Documentaries

Views: 1,933,863

Keywords: Channel 4, Channel 4 Documentary, Documentary, debt recovery agencies, dispatches, channel 4, credit (finance), agencies, cost of living crisis, debt, debt documentary, borrowing crisis, channel 4 news, cost of living, brexit, documentary, finance, stock, market, job centre, documentary 2022, c4 doc, c4 documentary, how to survive cost of living, tories, conservative government, labour, uk politics, money laundering, emergency, uk political documentary, inside money, money tips, money

Id: X9UlLGAywqU

Length: 46min 42sec (2802 seconds)

Published: Tue Nov 29 2022

Reddit Comments

[u/Cycleguy57]

Help me out here: the first guy quits his job to be a “stay at home dad” for his nine year old son? His son doesn’t appear to be special needs so what rationale does he have for staying home? He owns his own home so he could sell his house to release any equity he has. Going back to work would resolve pretty much all of the issues he has. Wealth inequality in this world is a major issue but he doesn’t appear to be a good example

[u/Swimming_Ad_1250]

I watched this documentary and quelle surprise the lady with the payday loan issue lived in Southend (where i live!). I didn’t think anyone actually lived in the flats that she lives in as they’re planned for demolition. She did seem to make a series of stupid decisions but why loans with such huge apr’s are allowed is beyond me.

[u/joan_wilder]

I can’t believe democrats are ok with letting Biden destroy Britain’s economy!

[u/MrFiendish]

Britain had the chance to pull out of Brexit, but they decided to give even more power to the Tories.

[u/Overthrow_Capitalism]

This is "progress" for you. It's 2023, we're one of the wealthiest nations on the planet, and we're facing the biggest decline in living standards since the Napoleonic war.

[u/ToddPolt]

What you expect from Tories?

[u/MrrSpacMan]

Good watch

But i wont lie, my first thought was 'is that Tracey Beaker?'