Millions struggling with rent / mortgage payments

Across Britain, millions of households are worried about keeping a roof over their heads as the New Year gets underway. A new survey from Shelter provides some disturbing figures.

In just 12 months, it seems, there's been a massive increase - of 44% - in the number of people struggling to pay their rent or mortgage every month, taking it to an estimated 7.8 million people.

In that time, millions have turned to unsecured debt to help them stay on top of those payments: nearly a million took out a payday loan, while 2.8 million used an unauthorised overdraft (around 280,000 of whom said they used an unauthorised overdraft for this every single month).

Shelter's Chief Executive, Campbell Robb, warned of the risks involved in using payday loans. "Payday loans may seem like a quick fix," he said, "but the huge interest charges mean things can quickly spiral out of control. It's vital that anyone who’s having difficulty paying their rent or mortgage gets advice now."

He went on to highlight the importance of taking action and getting advice now, before things "reach breaking point" and eviction / repossession becomes a real possibility.

Commenting on the findings, a spokesperson for Gregory Pennington stressed the need for households to understand their finances fully: "A mortgage or rent payment might be the biggest single bill a household faces every month, but all the other costs add up: if you're struggling to keep a roof over your head, it could be because your monthly debt payments are taking up too much of your income.

"Those payments are important, but they're not as important as mortgage / rent - and unsecured lenders know this. If you talk to them and show them where you stand with your finances, they may agree to accept lower payments that you can afford without using cash you need for life's essentials.

"They don't have to agree, but they're likely to if they can see it's the only realistic way for you to repay the money.

"There are drawbacks to repaying a debt more slowly than originally agreed - it can cost more in the long run and have an impact on the individual's credit rating - so struggling households need to find out more about the options open to them and understand their potential consequences.

"A good way to start is by simply talking to a professional debt adviser."

Matthew Plant

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