A recent report has indicated that many people are being forced into so much debt as a result of the government cutbacks that they are being steered towards getting money from legal loan sharks, putting them in an even worse financial situation that it even more likely to spiral out of control. The left wing pressure group Compass has released the report, claiming that the widespread cutbacks have had a profound negative effect on the financial situations of many people.
The report claims that many people are now being forced to turn to legal loan sharks in order to get the money that they need to keep their heads above water financially, which means that they are getting deeper and deeper into debt and financial trouble. The group carried out interviews with over 250 social housing tenants in the West Midlands and 28 percent said that they now found that their debt levels were unmanageable.
Of those that were polled the average income was less than £8000 per annum yet the average amount of debt that was being paid out was £1200, which meant that around a quarter of income was being eaten up by debt. With many of these households on such a low income anyway this impact of paying out a quarter on debt is financially crippling, particularly given the soaring cost of living.
Tags: way, control, order, group, cost, impact, polledOne official involved in the research said: “What makes this particularly alarming is that the Government is banking on personal debt increasing as a way to reduce the deficit but 28 per cent of those we surveyed are finding debts increasingly unmanageable. The Government’s economic plan could be driving borrowers into the arms of legal loan sharks which is a particularly unpleasant experience.”