Banks to tell hard-up borrowers what to spend their money on

30 August 2011

satelliteAre you in debt? Of course you are. We're all in debt and it's rubbish. Still, at least you've got little pleasures like satellite television and a mobile phone to distract you from the horrible pit of financial despair that you teeter along just before payday.

Wait! What's this? Some state-owned swines are going to tell low-income borrowers what they can spend their pennies on, telling them to stop having Sjy TV, having a mobile phone, even going as far as to ask them to stop socialising altogether.

Or you'll lose your home.

UK Asset Resolution, the organisation set up to manage £80bn of home loans made by Bradford & Bingley and Northern Rock, has identified 30,000 customers who could get in bother when interest rates rise and so, unlucky staff will be tasked with the job of ringing 2,000 customers a week over the next few month asking them to change their spending habits.

Richard Banks, the chief executive of UKAR, says:

“Some people won’t cope when interest rates rise, but for others there are remedies. They need to think about what is their most important debt. It’s not the credit card, or renewing their Sky subscription, or going out or the latest mobile technology, it’s their mortgage."

"They have been protected by low interest rates, but the consensus is that rates will start to rise late next year. We are taking a much more pro-active stance"

TOPICS:   Technology   Banking   Investments   Mobile   Economy   Consumer Advice   TV


  • Furry M.
    Income support is actually quite high in this country and one should be able to live comfortably on it (I have). The reason that most people struggle is that they find it difficult to manage their finances. Go to an area where people are in housing paid for by the government and you will certainly find plenty of smokers/satellite dishes. That alone is probably about £300 per month worth of unnecessary expenses for a couple.
  • Furry M.
    Richard Banks! Really?
  • Liam
    I've already had this from the Halifax when they were asking me to pay back bank charges. They claimed I couldn't be that hard up if I was scoffing on a Big Mac the other day.
  • Ben E.
    The assumption of course being that people on Income Support don't do cash paid jobs on the side, which we all know is twaddle.
  • Tom
    all this is fine if you're not in a contract but if you are you can't just stop paying. perhaps we could have legislation that, on condition of you providing proof you're on JSA, you can freeze contracts for up to 6 months. They then continue when you come off JSA. Might take away some of the burden while peope on JSA are gettign back on their feet.
  • Big G.
    WTF has income support got to do with this story?
  • Haggis1984
    +1 for Tom's idea....some consumer protection legislation aimed specifically at protecting the unemployed would be a great idea. Especially with the inevitable labour market deregulation coming from out Tory government.
  • Brandon H.
    @tom @haggis Good idea, but lenders could easily argue against this being forced on them by saying that payment protection insurance was offered at the time of taking out the loan.
  • Ex C.
    Collectors have been telling people this for years in banks. It quite curious what people said were payments they needed to make; one woman screamed down the phone that she had to pay for her son's Dr Who magazine if he demanded it in the shop. She was right that as it was a small amount she had borrowed so as long as she made the reduced payments we didn't care that much. The only thing with the interest charged she's probably still paying for it now! Most collection staff are quite reasonable, if you mention you're tied into contracts for sky and mobile phones they'll make that note. Though they will make the note when the contract is due to expire!
  • callum
    You sound outraged - but when I lend family/friends money and they are busy spending it on junk instead of paying me back, I feel pretty annoyed. I know everyone hates banks but I don't blame them for feeling the same.
  • Jim J.
    Why is it unreasonable for banks to give people advice on how to avoid losing their homes? Preventing people wasting money on unnecessary items rather than concentrating on debts that actually matter or helping them building up a savings buffer is surely something that should be encouraged not criticised. More shocking is the number of people who have absolutely no savings at all and have no means to pay an unexpected bill or mortgage increase. Living below your means is nothing new, even Dickens had reference in his books.
  • Dick
    I had a call from my bank earlier, and they said porn and jam doughnuts. At least, that is my excuse.

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