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Escape from the debt trap

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Are you feeling the financial squeeze after Christmas? There’s no need to turn to loan sharks and pay day loan companies to get help.

‘I think that more people get into debt at Christmas than any other time because they try to show their love and affection by buying things, and almost the bigger the better.”

That’s the view of Jo Kay, Christians Against Poverty (CAP) Debt Centre Manager for East Reading.

She continues: “People feel pressurised into buying big presents and that can lead to all sorts of trouble, especially if you have to put it on a credit card or get a pay day loan to pay for it all.”

Research by the Independent Money Advice Service suggests that one in three adults will start 2014 in debt because they overspent at Christmas – and one in 10 adults are still paying for Christmas 2012.

People then turn to pay day loans to make ends meet.

In May 2013, His Holiness Pope Francis spoke out against the way money is used in the world.

The financial system “tyrannises the poor and turns humans into expendable consumer goods,” he said, adding, “money has to serve, not rule”.

The Archbishop of Canterbury, the Rt Revd Justin Welby, has also spoken about money-related issues. He referred to “the devastating effects of debt” and “called for better regulation of the pay day loan industry”.

Jo and the team at CAP are just one such organisation that can help you work out a budget and stay out of debt. “Problems start when you are not aware of where money is going or you are overspending,” she says. “Having too big a Sky package or mobile contract.

“Then there’s too much coming out and there’s not enough money to go around.”

Jo knows how easy it is to suddenly find yourself short of money, even if you think you are on top of things. “Something always comes up,” she says. “There will be another school cost or something wrong with the car, or the bus pass goes up.”

CAP offers a free service and will help anyone regardless of religious beliefs. They ensure that nobody receives less favourable treatment on the grounds of race, nationality, religion, age, gender, marital status, sexual orientation or disability.

Jo’s advice if you are thinking of getting a pay day loan is to “think what can I afford to buy and what can I afford to repay?

“Ideally we would ask that people save and look ahead and not go for credit at all, but if you were to compare a Credit Union with a pay day loan there would be no comparison – you would go for the Credit Union.”

Community Savings and Loans (CSL) is Berkshire’s Credit Union. The Rt Revd Andrew Proud, Bishop of Reading, recently started to save with them. He said: “I’ve joined the Berkshire Credit Union – and I would really encourage you to do the same – not because you need to save, but because if you save with them, many more people can be helped to avoid debt.”

Credit unions make a good alternative to pay day loans by providing loans to members at very low rates of interest. They also provide members with help and support on managing their financial affairs (if required).

Credit union members make regular savings, as little or as much as they wish.

These savings then form a common pool of money from which loans are made to members. You can borrow from a few pounds up to £10,000 and the money is repayable from six months up to five years with no fees, no hidden charges and no penalties.

Part of the attraction of pay day loans is that they are quick and easy to apply for, but the interest on them is very high. They are frequently more than £30 for a 30-day loan of £100 which is equivalent to an APR of 5,000%.

It is not surprising that many borrowers, who are already in financial trouble, are unable to meet the repayment costs and become more and more in debt.

If you are worried about money, do not ignore the problem. Contact CAP or CSL to speak to people who understand your situation and are in a position to help.

“If you need a food parcel as a short term measure then I will certainly sort that out” said Jo Kay of CAP. If you are one of the third of the population who are in debt “having your head in the sand is the worst thing you can do. It is better to be honest with yourself, be realistic and get help.”

Reading Family Church is running a CAP Money course over three weeks this month. Each evening session is aimed at helping you learn or improve your budgeting skills. It starts at 8pm on Tuesday, January 21 and continues until February 11. For more details, contact Karen@readingfamilychurch.org.uk.


Henley Baptist Church will run a course on Tuesdays from February 11. Sessions are held in its d:two centre in Market Place and start at 7.30pm. For details, visit www.dtwo.co.uk.

Jo’s 5 top money tips

– Plan ahead. Now is the time to be thinking about saving money for Christmas 2014. 

– Set realistic expectations. Most of us aren’t the Beckhams and aren’t in their league. Educate the children that they will get realistic presents for birthdays & Christmas.

– Make it yourself: Home-made presents are so lovely and it doesn’t have to be electrical.

– Know where your money is going week by week. Stick to a budget. The spending that you can control most throughout the year is your food shopping. If you’ve got that nailed then you’re half way there for Christmas.

– Have free fun; enjoy a video and popcorn on the sofa with the kids. doesn’t have to be fancy or expensive



Where to go to avoid pay day loans


CAP (Christians Against Poverty)

CAP organises free money-management courses at a venue near you. Log on to www.capuk.org for more details.

CCA (Christian Community Action)

CCA has support centres in every one of its charity shops. For details, visit www.ccam.org.uk

Reading Frontline

Provides expert assistance to those who are in debt. For more details call 0118 956 9300 or log on to www.frontlinedebtadvice.org.uk.

Community Savings and Loans

Berkshire’s Credit Union is based in London Street, Reading. For details, call 0118 958 5803 or visit www.cslberks.org

Reading Borough Council’s Winter Watch

The Winter Watch campaign runs until March 31 and helps people struggling to keep warm in the cold. Call 0118 937 3747, or email winterwatch@reading.gov.uk

Rent arrears

Reading Borough Council helps tenants struggling with their rent.


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