The Source of Poverty - From Someone Living Through It.

Poverty is awful to go through. It's one thing to not be able to afford basic things like food and electric, but when the letters pile up and bailiffs are knocking it gets worse.

From my experience which I'm still going through. The problem behind my own poverty is simply this. You earn a living, you start your life, you live with those means. It takes only 2 months of reduced income to cause a massive problem.

Bills and utilities from a practical point of view. You're employed you can get a contract, broadband, pay rent, tax and such. Normal everyday social necessities.

If you lose your job or transition to a new one and there's a delay in pay, then the problems begin. Because finances are so slippery a lot of people are living on the fine line of poverty without realizing it.

If I give a quick rundown of a real life scenario.
+£1200 per month (after tax)
-£40 broadband/phone
-£500 rent (this is low for a 1 bed room flat, most go for >£500)
-£91 (avg single person council tax)
-£50 travel (avg price for a month bus pass)
-£25 water (avg rate of water cons)
-£65 electic (avg cost of electric heated flat)
-£45 phone (tied contracts)
-£15 insurance (could be home/belongs or both)
-£10 barbers
-£25 cleaning (both personal products and domestic cleaning for month)
-£120 food (avg cost for meat/fresh veg/salad/perishable foods from Aldi/Lidl (£30 p/w))

This leaves £214 remaining. - Most people would put that away but dip into it for the month. Entertainment like cinema, eating out, takeout food, shopping, gift buying etc. The reason why people now live pay cheque to pay cheque. Is for this reason. Throw in Netflix, Amazon Prime etc. its more money gone.

Regardless of the extra few after the £214 we are left with a person who lives their life within their means they are earning, and everything is swimming.



However, through no fault they've lost their job. It happens when you work private and it's a nightmare. Why? Because simply put when you lose your job you can rely only on your savings and benefits to help keep you afloat. But this will never work.

£1200 per month is now reduced dramatically to the current Universal Credit rating for a 26 year old at £593 per month.

The mandatory bills:
Rent, Tax, Water, Electric - is still way above that £593 mark. Moving isn't free so moving to another property is impossible especially when you are already in a low marked bracket. The luxury bills such as broadband and phone are tied into contracts with no exit clause for those who are claiming. So already it's a set up to immediately fail.

You can't rent with housing association or council with rent arrears so priority one is rent. Now after £593 has entered the account £500 leaves. £93 is left. You can ask for tax deduction which will help but £93 is still nothing to last a month even though food before was £120. The phone bill is £45, the broadband is £40. You can't pay these companies so there's a late fee, there's next month’s bill, there's more debt, piling, piling, piling.

Now you're on the brink of failing apart and it's only been 3 months. Quality of life has dropped almost zero and there's no end in sight.

What's even worse is the attitude we face. Those in poverty can very easily see that Universal Credit, the Council, Debt Collectors and Company Customer Service Reps believe everything will work out when you simply get another job. -

If we take that into account and we get another job at £1200 per month. This person is already being grounded by debt, unable to get credit, received the section 21 because eating food or paying a bill to attempt to avoid debt was the better choice. They're now on the waiting list but of course that's 8, 9, maybe longer in months depending on circumstances.
Renting in Leicester is an absolute nightmare! – For example, myself I've received a section 21, jumped onto an IVA to manage the debt I accumulated but now no estate agency will allow me to rent due to adverse credit. I was advised by a high street estate agent that there is a clause in the landlord insurance documents which means they cannot get missed rent collection if they willing rent to a tenant with adverse credit.

Private renters who earn from a full-time job only with an annual salary of around £20000. Should be ready to move out and live on their own, becoming members of society.

One slip in that plan and it goes left very, very quickly.

I’m not shy about sharing my experience, this is almost identical to the situation I’m currently in now and have been very lucky to gain employment with Leicester Council even with this lingering behind me. I sit here, writing this a day after pay day when 24 hours ago my account was at -£2.39. I’ve a court date in January for my landlord who wishes to evict me and I’m no further in my housing application with the council now than I was back in September when I first got my section 21 after being diagnosed with severe depression. - These is so much more to my experience including my partner who due to an unfair judgement was unable to claim any benefits properly since February either.

If anyone would like to discuss practical solutions, I can get you in touch with a couple other people who are also living in poverty, struggling to find a way out.

Why the contribution is important

I've read a lot about Money Advise Service, Step Change, Charities etc. but no one who wants to try and combat or battle the issue seems to understand where it comes from.

You can't make action without first identifying the source and there are so many different sources that one solution will not help.

One thing that really surprised me when I took up my job with the council is how no one in the office I'm located has any experience with life on Universal Credit.  - I'm willing to discuss with whoever wants to learn more about life in poverty, the struggles, the answers received when we seek help and why there is no one solution to fix all. I am now a council employee but in April 2018 you’ll find a voice recording somewhere in an archive of me on the phone to Leicester Council’s homeless team telling me they can’t help me while I was sat in a cold, wet tent. I have turned my life around but even right now I’m only moments away from being thrown back into that situation because of this modern-day poverty. There is a lot more to say.

 

 

- I get my discuss post is very long, and very detailed. But I have very little faith that people understand or grasp what poverty is or how it feels because if you are reading a statistic you think (wow that's bad we need to help...) but when you live through it you feel there is absolutely no help aside from "advise" which is useless when you don't have the means any more to act on advise.

by lukescotney on December 23, 2019 at 01:57PM

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Comments

  • Posted by Ninadsy January 11, 2020 at 08:18

    Hi Luke, I run Money Matters Leicester, a charity-run debt advice centre (Community Money Advice). We see many people in your situation. I've just been looking at our 2019 stats, and there has been a marked shift towards people getting into problems because of low income. I totally agree with your detailed and accurate description of living on low income and Universsl Credit. I also noticed that you said that you are in an IVA. You mentioned an income of £1200pcm. If this is still your position, then an IVA is not the right option for you. Sadly, online companies often sell people IVAs as the fees are considerable (£several thousand). Most of our clients on low incomes with no assets and debts under £20k go for Debt Relief Orders, which cost only £90 in total and last for only 12 months rather than the 5 years of payments (or 6 years if you don't own a house) of an IVA. Do get in touch if you have any questions on info@moneymattersleicester.org
  • Posted by lukescotney January 13, 2020 at 16:23

    @Ninadsy

    Hi there, that's crazy information! (Not in an I'm arguing but as in wow. I'm shocked that was an option.)

    I am lucky to still be working here for LCC and I don't see no reason to feel I won't be any time soon so my base salary is a good income. If I were a single person with a 1 bed flat and car I would be able to manage my finances to a point where I may have small savings. My only upset about advice in general is it seems everything is too late. Every information I gain while I'm in financial torment is stuff I should have done, before it hits the fan.

    I'll definitely be emailing you soon to get more conversation. I believe the main issue among poverty in Leicester is individuals never think it will happen to them, but when it does there isn't much knowledge. Soon as you hit that moment where you realise finances will become a challenge. First call would be go to Universal Credit, get your appointment and go from there. Claiming Universal credit they ask a lot of questions about your finances so you get a belief that you're going to be treated as bespoke but yet whatever is entered of you the results is always "base rate / means-tested" which if the DWP believe yes someone can live on £267 a week with the local housing rate as Housing Benefit which is I believe about the same £260 for a single adult expected to jump into a shared house.

    The idea that someone who loses access to their cash flow and therefore goes on Universal Credit is that they must then in the space of a month swap their life from the one I mentioned above. Flat, Car, belongings, independence... and drop it to Shared accommodation, belongings sold off and losing that security of livelihood. - Then on top of that all businesses with a contract require you to continue as if nothing has changed even though the person is alerting them at the earliest opportunity but it's a "continue to pay this price or face late fees, debt, fines, collections."

    Although we are discussing how to tackle poverty in Leicester, sadly it is the charities who will take the force of this national crisis.
    Maybe if Leicester was to raise the living rate for accommodation then more UC claimants in Leicester will be able to retain (at least possibly retain) their accommodation. And with that kept it's easier and more motivating for the individual to look for further work to gain financial independence again. Rent has gone up but the rating has not increased and it makes it seem like a punishment for getting a 1 bed flat and losing work.

    Leicester Council/Universal Credit need to work closer with agencies/landlords to bridge the struggle facing tenants once this life change exists.
    Sadly we can't press pause while we struggle to get into work instead we surf on this pillar to post type lifestyle trying to pay whoever we can with whatever we have left and businesses have no legal obligation to help.

    If you look at this from a political point of view, the less we get the harder we work and that of course helps the economy in wider view. But when the economy succeeds the hard workers don't get that feeling (raising living wage means nothing when rent, electric, gas, water and utilities are still going up.) Instead workers are kept working at their current rate until they crash, burn and fall into mental distress, financial disrepair, families fall apart and happiness is tarnished. However, the economy continues and we can't give an olive branch to those who crash and burn because that goes against the ethos of work hard be rewarded.

    Poverty is ugly and it's made up of a lot of different factors which work with you as an individual so long as you are chugging along with payments. But the moment you slip out of track then the businesses turn into enemies and pull all the money they can off you even if you call up to explain the situation. It means nothing.
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