For those in debt, or on a low income, January can be the hardest month of the year. We all want to give our families a fantastic Christmas, and it can be tempting to buy presents, food and decorations on credit card. Then, January hits, hours are cut by employers, the credit card bills arrive, and payments are missed. This can soon spiral out of control.

Unfortunately, it's the poorest households that suffer the most. They use credit to pay for credit, and if they aren't careful, they soon find themselves needing help from charities like Habitat for Humanity. In the UK it's thought that the poorest households are spending up to 25% of their monthly income paying for debt. If you think 50% of a low income could be rent, it doesn't leave much left to cover bills, food and other expenses.

The Full Extent of the Problem

The Latest statistics from the Money Advice Service state that over 8.3 million people in the UK have debt problems. These aren't people with a few hundred on a credit card or those that occasionally utilize their overdraft in an emergency. These 8.3 million people are in trouble. 25% of their income is being spent on debts. They can see no other option but to take out further debts, and services like payday loan companies are letting them. They fear the next bill or any large unexpected expense and their debts are keeping them awake at night.

The sad truth of it is that for many of these people, these debts seemed to come from nowhere. It might have started as an extra £12 to buy their children some new school shoes. Or someone being made redundant. Then, debts spiral and there is no way out.

The Never-Ending Debt

The main problem for these families is that their debts are never-ending. Of these families paying out 25% of their income on debts, 40% were found to be in near enough the same position two years later. For every £10 of debt, two years later, there is still £9 left. If one credit card is paid off, there is another in its place, or a long line of debts to target.

Fake Help

As a society, we're bombarded by promises. Everywhere you look there are adverts for interest-free balance transfer cards or low-interest consolidation loans to get you out of debt. The only problem is, the poorest families, the ones that need these solutions the most, would never get accepted for them, as their income and credit ratings are too low. They even run the risk of applying, being rejected and having their credit score further dented.

Then, there's housing. Last year the government promised to out £2bn into building affordable housing, and there is already the popular “help to buy” scheme. But, what good is a 5% deposit if you can't get a mortgage. The truth is that most of the people that end up buying these affordable houses could afford to buy normally with just a little more saving, and the really low-income families, that need help, the poorest households are falling deeper into debt as they are stuck paying extortionate amounts of rent.

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