Debt - the poor pay more
Low-income families are being pushed even further into debt by having to pay more for essential needs such as heating and lighting.
Families, who have pre-payment meters installed for energy consumption, pay 10% more for gas and 8% more for electricity.
Households who have to rely on higher purchase to keep their budget afloat, such as mail order catalogues, also pay over the odds for items which are sold in the high street at a fraction of the price. A typical oven will cost £159.99 when purchased in cash from a high street retailer but an identical model purchased from a mail order catalogue will cost £405 when debt repayments are spread over 125 weeks. This amounts to a long standing debt for something which is clearly not worth the price.
Pre-pay phones also clock up higher debt, as the cost per call is more expensive when compared to a contract phone. People who survive on low incomes are also likely to pay higher insurance premiums if they live in areas which are prone to crime.
It seems ironic that the range of cheap credit, personal loans and credit cards with 0% interest are unavailable to the poor as these are the ones in need of the extra savings. As a result, these people are left to sink into more debt from the doorstep lender who will often charge up to 300% in interest.
In comparison to someone whose can take advantage of the money saving options, the poor accumulate £1000 per year extra debt.
Savings News posted on 20/08/2007 10:17:41
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