advice centreOne of the debt charity StepChange’s  advisers moved on earlier this year. His farewell blog post was very informative: a good example of the advice that’s available regularly on their blog. I am sure he – and StepChange – will not object to my quoting it.

“Six truths about debt I’ve found from working at StepChange Debt Charity” (Matthew Cooper)

Truth 1: Creditors will generally accept your best offer of payment

Provided that they are convinced it really is your best offer, I’ve usually thought this to be true. But Matthew’s evidence in support of the theory is amazing: only one proposal rejected … out of 300!

“My job was to give advice on debt solutions and draft the actual individual voluntary arrangement (IVA) documents for clients. I drafted around 300 IVA proposals in about two years. All but one of them were accepted by creditors. I learned that if you make your best offer to creditors they’ll generally be willing to accept.”

Truth 2: Debt can happen to anyone

That’s something I found when researching stories for my book ‘Back to the Black.’ Matthew confirms this:

“While working as an IVA drafter I heard many stories of how people ended up in debt. In most cases debt problems are caused by life-changing events such as unemployment, relationship breakdown, accident or illness.”

Truth 3: Bust out the budget

Here’s the painful part, when you move out of the “denial” phase and start to analyse your financial position. Some humourist once said “A budget is a mathematical confirmation of your suspicions” … but it’s surprisingly true that knowing the worst is less stressful, compared with suspecting the worst but not being sure. Then, when you have an accurate picture of your current situation, you can start to draft a budget (maybe a few versions for different scenarios: see my book) that’ll help you decide what to do next. Matthew says:

“In my time here I’ve helped a lot of clients to put together a budget; as someone who is keen on budgeting I was sometimes amazed that some had never put an accurate budget together before. Over the years I’ve seen the clients who paid careful attention to their budgets be successful in repaying their debts. I now spend at least an hour a week looking over my budget to make sure I stay on track. An emergency fund is also a vital part of a budget, whether you have debts or not.”

Truth 4: Credit isn’t necessarily bad

“I’ve learned that credit isn’t necessarily a bad thing in itself and, like most things in life, it can even be good in moderation. It’s vital not to over-commit yourself though and you should be prepared as your life can change at any time. Despite their bad press creditors aren’t all bad either, as long as you’re honest about your situation. As a charity we want to help the ‘can’t pays’ rather than the ‘won’t pays’; creditors tend to share this attitude.”

That’s an interesting statement right there at the end: the “can’t pays,” as he puts it, are the group that StepChange exists to help; and they are the group with whom creditors are more likely to negotiate reasonably.

Truth 5: Never pay for debt advice

Matthew says:

“I’ve also learnt that there is genuinely no need to EVER pay for debt advice. Our advisors are brilliantly trained and highly knowledgeable and will always strive to give the best advice for your personal situation. We’re not for profit but we are for giving best advice.”

Truth 6: My colleagues are great at helping people in debt

I’ve never spoken to those colleagues personally; my own crisis was back in the ‘90s. However, judging by the quality of the info on their blog, I would support that statement 100%. So I’m sure Matthew won’t mind if I repeat in full his plug for his colleagues:

“I’ve made some great friends while working for the charity and together we’ve served a great common cause – ‘free debt advice’. My colleagues are knowledgeable, committed, ethical, funny and warm and they treat people who contact us with a great deal of empathy and never judge them. It’s time for me to hand over to another person to take on my role now. I hope they enjoy it and learn as much as I did during my time with this great charity.”

Citizens Advice was the charity that helped me with my debt crisis, largely because they had a Bureau near me where I could have face-to-face meetings. However they are a generalist advice charity, whereas StepChange is a debt specialist.

And judging by their blog, an excellent one.


For Stepchange’s “Moneyaware” blog, click HERE.

For info about my book “Back to the Black”, click HERE.


Payday loan providers have attracted column inches from many writers, including yours truly. Now these firms have been summoned to a “summit” hosted by Government ministers.

Will concrete action follow?

Here’s a précis of a story in the Independent today.


 Payday lending: adverts to face ban?

Payday lending advertising could be banned, under hard-hitting new rules being considered by the new City Watchdog the FCA.

The high-cost credit industry (that’s a new term to me) also faces a crackdown on the number of times they can rollover loans; and they may be forced to introduce time-lags, so borrowers don’t end up choosing a lender on the basis of how quickly it can get the cash.

This emerged from a Westminster summit yesterday. Consumer Minister Jo Swinson, who hosted the summit, said there is a need to control the number of loans borrowers are allowed to take out. She intimated that lenders could be forced to set up a central register of borrowers to cut the practice of multiple loans. One borrower reportedly had 34 different loans at the same time.

Ministers were told of far-reaching proposals that could ban daytime adverts on television that target the unwaged and vulnerable people. However the FCA’s Martin Wheatley didn’t rule out a blanket ban on lenders. “That power will be available to us,” he said.

Delroy Corinaldi of debt charity Step Change called for all payday loan advertising to carry a health warning that includes information about the risks of using high-cost credit. “In particular, companies must be clear that loans need to be realistic and affordable and are not a way to deal with long-term financial problems,” he said.

Citizens Advice’s Gillian Guy was keen to see new action on advertising. “Payday lenders need to be clear about who they are targeting. We see daytime television adverts with glamorous celebrity endorsements, targeted at the unemployed and those on low incomes.”

The FCA also announced at the summit that a consultation will be launched in September to decide its approach to controlling payday lenders.

However Richard Lloyd of Which? said: “Positive noises about tough new rules have come out of the summit … but these must now be backed up with more concrete actions than we’ve seen today.”



Here’s the full story from The Independent.

Here’s my last post on this issue.


According to the Financial Ombudsman Service (FOS), even higher earners are  falling foul of payday lenders nowadays.

Martin James of the FOS – quoted by Holly Thomas in the Sunday Times on 2 June –  said that “in some cases, lenders (that’s both payday lenders and mortgage providers – Ed.) were found to be unsympathetic with borrowers on higher earnings, assuming they were not in financial difficulty because of the high value of their homes. Many asset-rich people are cash-poor.”

In cases of payday lenders “assuming they were not in financial difficulty”, that sounds like a good excuse. But I don’t imagine too many people would seek funds from a payday lender unless they were in financial difficulty, even if it were only a temporary cashflow problem. And the lenders must know that.

Holly Thomas’s article continues with advice from a variety of impartial experts on how to clear debts:

  • Don’t prolong the situation.
  • Consider downsizing your home if it’s feasible. (That of course assumes you can sell in today’s market.)
  • Ask your lender to vary the terms of the loan; e.g. to extend a mortgage term, or even switching to interest-only. (but the latter only for a period – Ed.)
  • Negotiate a debt management plan with the help of one of the free advice services. (National Debtline, Citizens Advice or StepChange)


For the full Sunday Times article (but note there is a paywall), click HERE.




In my last post I talked about a claim that over-60s are particularly hard-hit by debt nowadays. The claim originated from a report from the charity StepChange, which was picked up by the “This Is Money” website.

I’ve just seen an endorsement of this statement from someone else with financial credibility. Peter Hargreaves is Chairman of financial service provider Hargreaves Lansdown and he writes in their monthly magazine as follows:

“Most of the industrialised world is enduring interest rates lower than inflation.

“There are material implications for savers, especially for people who rely on their savings for income. The problem is further aggravated for the retired, as their personal rate of inflation is probably greater than the published figure.

Official figures take into account many items which have come down in price but which are discretionary purchases. These include consumer durables such as PCs, cameras and other hi-tech gadgetry.

On the other hand staples and essentials – food, power, water, council taxes (??) etc are all increasing in price, meaning that retired people on fixed pensions or dependent on income from their investment capital are the hardest hit by the current situation.”

Hargreaves makes a good point. I have often written that we should not get too hung up on the official inflation rate, because that is an average, based on a “basket” of goods and services. We might not need or want to spend money on all these items in the “average” way, so our own personal RPI (retail price index) is what counts. But he stresses that for older people (and I am one of them) their personal RPI might well be above the official figure.

That’s true; I haven’t bought a PC or a camera lately but I have definitely noticed energy and food getting more expensive. Some of those cost increases I can mitigate by changing my buying choices; but some of them I can’t.



1. To read the full article by Peter Hargreaves, click HERE.

2. To read the StepChange story from This is Money, click HERE.

Editor’s note: StepChange was formerly known as Consumer Credit Counselling Services, one of the three national independent debt advisory organisations, so they know whereof they speak.

Photo Credit: Public Places via Compfight cc


A recent story from “This is Money” surprised me; but I can see now that it should not have been a surprise.

Here’s a summary:


According to debt advice charity Stepwise, the effect of rising living costs is pushing more and more over-60s into debt. The numbers in the report were pretty dramatic.

The number of over-60s who contacted them for debt advice had increased by 39% from 2009 to 2012.

And in 2012 the average debt of those over-60s was higher than any other age group.

For example, on credit card debt alone, the over-60s had average debts of about £15,000, which was 50% higher than the average of all age groups.

StepChange’s director Delroy Corinaldi talked of a key reason: that those in this age group who are struggling with debt are particularly vulnerable, as their earning potential has diminished’

Another explanation: age campaigners have complained that ‘rises in living costs hit older people harder because they spend a greater slice of their income of everyday essentials such as food, heating and electricity. These have risen in price more quickly than the overall rate of inflation.’



The facts speak for themselves. And the explanation is totally logical.

The “living costs” part of the explanation was emphasised in a recent article from “Investment News”, the monthly magazine of the investment supermarket Hargreaves Lansdown. I’ll cover that in a future post.



 Here it is!



By ED MONK, This is Money

Published 9 May 2013

Levels of credit card debt are higher among the over-60s than the population as a whole and increasing numbers are resorting to debt advice, a debt charity has reported.

The alarming warning contradicts the stereotype of younger people being the most indebted and highlights the financial difficulty many older people are suffering even after they retire and are unable to easily boost their earnings.

It comes as another charity, Age UK, launched a campaign today to ensure older people claim all state benefits owed to them to alleviate rising living costs. (See below).

Age old problem: Over-60s looking for debt advice have more on credit cards than younger people.

StepChange, the debt advice charity, reported that the over-60s clients that it advises have average debts of £22,999 each, versus an average of £17,635 across all clients. The figures relate to unsecured debt and do not include mortgages.

It is credit card debts that are weighing most heavily on older people. StepChange clients above the age of 60 had an average £15,152 of credit card debt, versus £10,006 for all age groups.

(that’s 50% higher! – Ed.)

The same trend is evident for catalogue debt – £2,026 for the over 60s compared to £1,808 for all age groups – overdrafts – £2,467 compared to £2,026 – and store cards – £2,005 compared to £1,196.

Step Change said that 13,148 people over 60 contacted it for advice last year, up 39 per cent from 9,628 in 2009.

Delroy Corinaldi from StepChange said: ‘Whatever someone’s income level during their working years, most would expect to be in a stable, if not comfortable, financial situation when they are older. Unfortunately those in this age group who are struggling with debt are particularly vulnerable as their earning potential has diminished.’

One possible explanation for the trend may be that older people are unable to easily increase their income, meaning that any debt they have when they stop work becomes unsustainable more quickly than for working people, pushing them to seek advice sooner.

Additionally, this generation had access to higher levels of borrowing prior to the credit crunch.

Age campaigners have complained that rises in living costs hit older people far harder because they spend a greater slice of their income of everyday essentials such as food, heating and electricity. These have risen in price more quickly than the overall rate of inflation, currently just 2.8 per cent.

Charity Age UK reported today that almost a third, 32 per cent, of older people admit to struggling financially, with more than half, 56 per cent, worried about basic living costs such as buying food and keeping warm.

Age UK said that its research showed a third of older people are feeling financially worse off than this time last year, a quarter admitted they had cut back on luxuries and a fifth said they had bought cheaper or less food.

One in five had cut back on heating their home this winter

The charity has launched a campaign to encourage older people to claim all the state benefits they are entitled to. The campaign is being backed by high-profile money saving expert Martin Lewis.

Despite over four million pensioners being entitled to pension credit, Age UK said, a third of those who are eligible don’t claim it. Yet if all those who are entitled to Pension Credit put in a claim, it could boost their income by an average of £1,716 a year.

Michelle Mitchell, Age UK’s Charity Director, commented: ‘At a time when so many people are struggling financially, it is a huge concern that vital benefits are failing to reach some of the poorest and most vulnerable older people in our society. This is money that could make a real difference to their quality of life.’

The call is at odds with Government noises that wealthy pensioners should give up universally available benefits such as the Winter Fuel Payment and free TV licences.

Age UK has just published a new guide – ‘More Money in Your Pocket’  – to help older people claim the benefits they are entitled to. To order the booklet, call Age UK Advice free on 0800 169 65 65 or visit, where there is an online benefits calculator to show what extra support may be claimed.




1. The debt advice charity StepChange was previously known as Consumer Credit Counselling Service.

2. For more articles on personal finance from “This is Money,” go to

3. For information about my book “Back to the Black: how to become debt-free and stay that way”, click HERE.

Photo Credit: Public Places via Compfight cc


A recent report by the debt advice charity StepChange points up two main issues:

  • Regional variations in debt burden
  • The special risks for self-employed people.

There are bound to be regional variations in almost anything. What was notable, though, is that the region where people are spending the highest proportion (30%) of their disposable income on debt interest payments, is the South East.

However, the section in the summary that hit me in the face was this:

“Self-employed struggling: partly because of high levels of secured borrowing – possibly taken out to keep businesses afloat – self-employed people advised by the charity owed on average £300,000.

“Clients in part-time or full-time employment had an average debt load of 4.1 times their income. For self-employed people this rises to 18.6 times their income.”

[Note: The figures apply to debtors who are or were clients of the charity. They are not necessarily typical of the population as a whole.]

The difference between 4.1 and 18.6 is remarkable; and I can empathise, because I was in the same situation fifteen years ago. I had a business that had done well for five or more years but then “fell on hard times”, to put it euphemistically. Like the clients of StepChange, I increased my borrowings (secured or unsecured, they were still debts) in an attempt to keep the business afloat. By the time I decided that would not work, closed the business and concentrated 100% on solving the debt problem, my total borrowings were several times my income. Not eighteen times, but a lot.

How I solved the problem is told in my book “Back the Black: how to become debt-free and stay that way.” (Amazon: paperback and Kindle eBook)


For a copy of the report by StepChange: