On 9th May, Christians Against Poverty (CAP) published its annual client report, Changing Perceptions. The report is designed to highlight some of the running trends we are seeing in the lives of our clients, helping to build a picture of what life is like in debt and poverty in the UK today. In 2018, CAP helped 24,300 people take steps to change their situation, which includes help with debts, finding work, tackling life-controlling dependencies and building general life skills.
The debt advice sector has seen a lot of change in recent months and years, including seeing a widespread increased need for debt help, new and improved technology and changes in funding. Yet one thing that has not changed is the continued rise of priority debts, which reached another peak for CAP clients in 2018. Of total debt make-up, 38% was owed to priority creditors, which equated to an average of four debts per client. Changing perceptions found that the most common priority bill to fall behind on was Council Tax (43%), second was water (37%), then rent (18%) and benefit overpayments (15%). It was also found that just over two in five (41%) new clients in 2018 had a deduction from their income to repay a debt, up four percentage points compared to 2017.
As people continue to struggle to meet these important living costs, we also found that in 2018 more than half (54%) of clients had borrowed in order to pay another bill or debt. The most common form of borrowing was credit cards, which 75% of CAP clients had used. Personal loans were the next most common, with 46% having taken one out. Arranged overdrafts were also used by over two in five clients (43%).
The report also compared forms of borrowing against income brackets. Over nine in ten (93%) of those on the highest income bracket (more than £2,700 a month) had credit card debt, compared with 62% of those earning less than £900 a month. People were twice as likely to have used an authorised overdraft in the highest income bracket, 60% compared to only 31% of those in the lowest bracket. Social Fund loans were more frequently used for those in the lowest income bracket, as were payday loans and doorstep loans.
Encouragingly, the number of people waiting three or more years before seeking debt help decreased eight percentage points in 2018, from 38% to 30%. However, despite people seeking help sooner, the level of destitution reached whilst in debt and on a low income was quite shocking. We found that one in four (25%) people we helped had gone without carpets because they could not afford them and one in five (19%) did not have any curtains. It was also found that 15% lived without a bed or mattress because they could not afford one. It’s likely most of us would take these household essentials for granted, showing the true extent of deprivation people are facing.
To exacerbate the poor living conditions, four in five (80%) said they felt lonely or socially isolated. As many as one in five (22%) did not leave the house for more than a week and 18% spent Christmas Day on their own. Debt not only causes poor living conditions, but also erodes social networks and pushes people into isolation.
‘I spent years in an abusive relationship. He was controlling and violent, and to make it worse, when our relationship finally ended, I found out I was in £10,000 worth of debt. I thought he had been keeping up with the bills, but he hadn’t and most were in my name. My kids were really affected by the relationship breakdown, I felt like such a failure to my kids. I could barely put food on the table. I couldn’t sleep at night, so I would just lie there. No one reached out, I felt so unimportant and worthless.’ – Nicky, CAP client
Changing perceptions follows Nicky’s story, from a place of desperation to a life of freedom. Her CAP Debt Coach described the transformation as ‘redefining herself as a survivor, no longer the victim but the victor over her life.’ Take a look at the report to see how CAP Debt Help and CAP Job Clubs helped Nicky overcome so much.
It’s not only Nicky who has experienced this sort of life transforming help. Two in three (63%) clients were no longer afraid to leave the house and three in four (75%) were no longer afraid to open the post. It was also found that 62% were able to sleep better after receiving CAP’s help.
‘As hard as it was to admit that I was in trouble, I’m so glad I did. I repaid my debt over four years and a complete weight was lifted off my shoulders. I feel like I’m actually living now, I’m happy about things. I’ve learnt I’m just as important as anyone else, I deserve to have a life too.’
Dawn Stobart, Director of External Affairs, Christians Against Poverty
To read more of CAP’s findings, you can read the full report by clicking here.