My benefits are reducing and I am getting into debt!

On December 10, 2010, in News, by Lewis Alexander

From January 2011, the changes announced by the coalition government to the welfare state will start to take effect in phases.  In what has been described as the biggest reduction in welfare provision in peace-time, some of the wide range of benefits offered by the state are being held at current levels, whilst others are cut, or for some of the more complex benefits, the earnings limits to qualify are being stretched in order to include fewer UK households, individuals and families.

This has led to claims from those in this situation and action groups who represent those on benefits that this policy means ‘My benefits are reducing and I am getting into debt!’  Amongst the groups most worried are the working families, on low incomes, who rely on benefits to supplement their incomes from their hard-working jobs.

  • So is this necessarily true? And what can be done to prepare for this drop in benefits income?

The first step when there is any change in your financial circumstances is to understand exactly what these changes are.  The range of announcements made as part of the widely reported Government Spending Review are available in a variety of locations.

If you are not clear on how these changes may impact you, a telephone call to your benefits agency should help to put you in the picture or alternatively you could contact your local citizen’s advice bureau.

It may be that the changes announced wont impact you for a number of months, meaning you have more time to secure that extra overtime shift at work, have time to look for a new and improved job or simply have time to cut out some of those ‘nice to have’ items that have crept into your life (Is that gym membership really providing value for money?!)

Once you understand the new budgetary constraints that you will be working under, it is possible to sit down and assess how you can amend your personal spending habits in order to avoid slipping further into debt.   If having looked at all the new facts and figures you still believe that you there is no waste to cut, then don’t panic, the first stage in any financial change is identifying that there is a problem and starting to engage with your creditors to explain the changes to your personal and financial situation.

Whether it is a personal loan, car finance, or a straight-forward credit card bill, financial services companies will be getting used to the idea that many of their customers are about to experience a change in circumstances, or at least they will be if they have been watching any of the recent news articles on the subject!

Options available to clear debts include increasing the term of your credit agreements to reduce your monthly commitments, using up payment holidays where these are available under terms and conditions and sometimes pure and simple hard negotiation on the rate you are being charged can all make a difference to the amounts you need to repay each month.

  • If you are still uncertain on what to do, or would like to benefit from a financial health check, then call Lewis Alexander on 0800 018 6868.

Our team of professional and dedicated debt management advisors will offer advice based on your personal situation and capture some important details and will then be able to work with you and your creditors to develop a debt repayment plan that you are happy with.   This can help to provide peace of mind that your creditors are being managed confidently and carefully by our team of debt consultants.

At Lewis Alexander we understand the pressures that hardworking families are under in the current economic climate and how the recession is changing our villages, towns and cities.

As long as you have a regular source of income, together with a will and determination to improve your personal circumstances then we can help!

Our professional debt management consultants are ready to take your call now, so contact Lewis Alexander FREE on 0800 018 6868 and allow us to help you to change your financial life for the better!

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