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    The "Poverty Premium !"

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    papa_umau
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    The "Poverty Premium !"

    Post by papa_umau on Fri 06 Jan 2012, 12:28 pm

    How Britain's poorest are paying the highest costs of living

    THOUSANDS of Britain's poorest families are being charged over the odds by energy companies, money lenders and retailers.

    Save the Children estimate the country’s lowest income families pay a £1280 a year “poverty premium” that the better off don’t. Mark Ballard, head of policy at children’s charity Barnardo’s, last night warned unscrupulous charging was creating a “generational poverty time bomb” and pushing many youngsters to hopeless lives of hardship. The extra cost comes from every angle for hard up mums and dads desperate to give their kids a decent upbringing.

    ● Gas and electricity prices for people with pre-payment meters are higher than those for customers paying by direct debit.
    ● Many turn in desperation to lenders offering “payday loans” at astronomical interest rates.
    ● Hire purchase retailers often charge more than double for essential items such as washing machines and fridge freezers.

    A Save the Children spokeswoman said: “It is a shocking that families on a low income are still paying more for basic goods and services than better-off families. “Low-income families shouldn’t be penalised for being poor.”

    Housing charity Shelter warned that many thousands of people in Britain were forced to take payday loans last year – at annual interest rates of up to 4000 per cent. Gordon MacRae, the charity’s head of policy, said: “They can quickly lead to snowballing debt, repossession and homelessness.” Many credit cards available to high earners won’t charge any interest if balances are paid off within a specified timescale.

    The poorest families are also paying much more for gas and electricity and often ending up in the cold and dark because they haven’t been able to top-up prepayment meters. These meters are put in the homes of families who struggled to pay bills in the past or of customers without a bank account, but they rarely give the best tariffs and turn the supply off when users cant afford to top-up.

    Save the Children estimate that many more thousands of families will struggle to heat their homes this winter and that thousands of children would get ill as a result.

    One retailer thriving through the downturn is Brighthouse. They use the old fashioned hire purchase model – selling furniture and electronics to shoppers on low incomes.
    Their sales in the six months to the end of September rose 16.3 per cent to £127million and profits jumped 22 per cent to £20.7million.

    Barnardo’s yesterday said they harboured “strong concerns” over the buy-to-rent sector.
    The squeeze on the worst off isn’t only coming from the private sector. It has been estimated that out-of-work benefits for working-age adults without children are worth 20 per cent less than in 1997.




    Well folks, there you have it in black and white. Not only are the rich getting richer and the poor are getting poorer but the poorer families in Britain are getting ripped off at a far greater rate than the rich are.


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    Angie baby
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    Re: The "Poverty Premium !"

    Post by Angie baby on Sat 07 Jan 2012, 12:41 pm

    Yes Papa, that's a real shocker when you see it written down.

    I am surprised that no government of the past have at least tried to solve this iniquity.

    It is bad enough when we sit and watch the rich getting richer all the time but it is even worse when we watch the poor getting hit even harder than the rich do just because they are poor and are seen as a bad risk.

    Mind you I think that this has always been the way and I cannot see anything coming that might change it.
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    papa_umau
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    Re: The "Poverty Premium !"

    Post by papa_umau on Sun 08 Jan 2012, 1:33 pm

    I think that you have just quoted the totally correct problem here:

    The poor of the country ARE - just like the so-called "sub-prime" market that helped to nearly bring down the whole global banking sector a few years ago - truly a "bad risk" as far as lenders and retailers and utility companies are concerned and that is why they are charged a premium for getting credit of any kind.

    There should be a better way to do this but it seems that they have been either unable to find one or they just don't care.


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    Hell's Granny
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    Re: The "Poverty Premium !"

    Post by Hell's Granny on Sun 08 Jan 2012, 2:45 pm

    What really bugs me about the energy comanies is 'front-loading', charging a higher amount for those who use the least energy, when it should be the other way round, with excessive users being charged the most.

    Cheers, HG
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    papa_umau
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    Re: The "Poverty Premium !"

    Post by papa_umau on Sun 08 Jan 2012, 3:07 pm

    Yes, you are right again HG...they do seem to have this the wrong way round !


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