Episode 3 Right on the Money

Whether you're a spender or a saver,

we could all do with knowing how to make the most of our cash.

So we found simple advice for you to do just that

and taken it to towns and cities right across Britain.

Whatever help you need with your finances,

we are Right On The Money.

Hello and welcome to Right On The Money,

the show that's all about

helping you free up some extra cash without it becoming too complicated.

Today, we're in the city of Leicester,

which has had its fair share of attention over the last few years.

Oh, yes, there was that small matter of finding

and reburying King Richard III

and some would say they've got a half-decent football team.

Let's see if our tips today can get you in the Premier League

when it comes to moneysaving. Here's what's coming up.

With millions of us owing more on credit cards than ever before,

we help one family face up to some tough home truths

to tackle their debts.

I feel like we're bad examples.

This is not the right way to go about things.

And how to transform your wardrobe without it costing a penny.

I'm definitely getting the same sort of thrill out of shopping,

but I'm not actually spending any money, which is amazing.

Now, Leicester City have proved that a fairly small budget

will get you very far.

But sticking to a budget is something one debt-ridden

family are really struggling with.

And they desperately need our help. So let's see what we can do.

Husband and wife Ian and Angela have a big family.

Two of their children live at home

while four more have flown the nest.

But the couple didn't have the most romantic of starts.

They met in their local supermarket.

I popped into our local Tesco's.

I saw her in the chocolate biscuit aisle.

She was going for some Kit Kats.

So I did the only thing I could think of doing,

which was crashed my trolley into hers.

-Corny.

-HE LAUGHS

Sparked a conversation.

And it went from there. Our first date was 20 years ago.

-We had four children. And then we had two more together.

-Mm-hmm.

But Angela and Ian don't just have a big family,

they have a big problem.

Like many other households, they've built up mountains of debts.

We're kind of in this impossible situation at the moment where

if we're going to pay the debts off just by paying monthly amounts,

it's going to take us years and years and years to do it.

Absolute nightmare.

Ian and Angela fell into serious debt

following a dispute with a builder.

Then shortly afterwards,

Angela's sister in America was diagnosed with terminal cancer.

My poor older sister, she got breast cancer.

And she lived in the States.

So we tried to get over there as much as we could to see her,

because the outcome was not going to be good.

The only way that we could really do that was using credit cards.

I would do that again. I would sell anything, you know, to do that.

We were doing car-boot sales every weekend

to get enough money to give the kids dinner money

to go to school the following week. And it was tough.

But, you know, we just did everything that we

could to keep the family together and to keep things going.

OK. Try again. If you get another W, you go to jail.

But the family's debt has spiralled out of control.

And despite their efforts, it keeps growing every month.

£60,000.

I think, at the moment, all things being equal,

we'll probably finish paying all the debts off about

five minutes before we disappear off this earth.

-Yeah.

-So my worry is that, you know,

we want to be able to enjoy our retirement.

And the way we're going,

we're going to still be paying debts off through our retirement.

Time to call in personal finance expert Sarah Pennells

for one of her toughest challenges yet.

And straightaway, she breaks the news that things are even

worse than Ian and Angela had feared.

Have you added up how much you owe - setting aside your mortgage -

but on the loans, the credit cards and the store cards?

How much did you owe last month?

It's just over 90,000 at the moment.

When I looked at the figures you had,

I actually worked it out as being over £101,000.

How does that make you feel?

-Dreadful. Really bad.

-Yeah.

-Really bad.

If these guys don't sort their situation out quickly,

they could lose everything they have.

A credit card provider could just look at your overall debt levels

and without you missing a payment,

-they could just decide to reduce your credit limit.

-Mm-hmm.

And so it wouldn't be something that you had done by not making payments,

-but the effect could be quite dramatic.

-Severe. Yeah.

-Yes.

-Yeah.

-Catastrophic.

-Yep.

-That was the word I was going to use.

-And I thought maybe it sounded overdramatic.

-No, but it isn't.

-It's true.

-It's not.

And that's one of the things that's hanging over us all the time.

It's going to take more than just a few savings here

and there to get the family's finances back on track.

They're actually pretty savvy

when it comes to switching suppliers and finding the best deal,

but they're still very quick to reach for the credit cards,

especially when it comes to buying gifts and treats for the family.

I am guilty of over-indulging my children.

You know, we want to treat our children for their birthdays

and Christmas. So it does cost quite a lot.

Yeah, it is. But it's family, and family is very important to us.

Now, of course, these two are far from the only Brits who've

got in the habit of flashing the plastic.

But Sarah wonders if they realise just how much

they rely on their cards to fund their daily life.

So she's come up with a plan to make that crystal clear.

So we've got a little bit of a challenge for you,

which is to look at your spending over the last 12 months

and just to pop these stickers on things that you've bought

with either your credit cards or your store cards.

-Now we're going to give you ten minutes.

-OK.

Bring back here the things that you can carry.

If it's something big like furniture, we've got some stickers.

-You can just pop them on. So, off you OK.

-BOTH: OK.

A new mattress.

Television.

Rug for this room.

And we've had the whole bathroom redone.

These trousers.

Wow, Ian and Angela are going to run out of stickers if they carry on

at this rate. But they're in good company.

Between us, we put more on our cards than anywhere else in Europe.

In fact, the UK accounts for not far off a third

of all EU credit card spending.

That. That.

That.

OK, Angela and Ian, five minutes left.

This bathroom, yes. This bathroom was redone as well.

Time's up, and Angela

and Ian are face-to-face with the cause of their sleepless nights.

-That looks expensive.

-It is expensive.

-Yeah.

-How much was it, roughly?

-That's £350.

-OK.

Between them, Angela and Ian have five credit cards

and five store cards.

And Sarah's been through the statements

and spotted that, like tens of thousands of people

across the country, they often stick to the minimum repayments

and never pay off the full amount.

The one thing I did notice is that you're buying some clothes

and then you're making a payment,

but you're not paying off what you've spent.

So each month, say you've spent, I don't know, £70 or something.

And then you've paid £35.

But you're still worse off because the debt has grown,

-plus you've paid interest on the whole lot.

-Interest on top.

Not just on the £35.

That was just one thing that struck me. Did you...?

Are you aware that's what you do?

Not really. It's wha... We juggle about with what I can do.

What I think I can afford.

And just pay what I can out of our monthly budget, really.

Unless they start paying off what they owe differently,

their total debt will keep growing with every purchase.

And there's something else Sarah wants to confront with them -

the amount of food they waste.

Though only four people live in the house, they spend a big,

fat £1,000 a month on groceries.

So Sarah has asked Angela to put aside all the things that,

like plenty of other households,

they typically bin at the end of each week.

I have to say, Angela, I'm really kind of surprised at what's here

and what you're going to be throwing away.

So maybe one of the ways that we can make some savings is to get

you to be much, much tougher about what you spend on food.

What do you think, now you've seen this as well,

about what your mum and dad spend on food and what doesn't get eaten?

I guess when we leave to go shopping,

we don't think about what's already in the fridge,

so we buy just in case it's not there.

So now we need to make lists and change how we shop.

It's an opportunity.

I like your attitude.

But it is in a way, because the good thing is

you've now seen how much you waste.

And there's nothing like having it all in front of you to

realise actually what's going on.

Around two million tonnes of food is chucked out in the UK every year.

But if this family can become more disciplined with their weekly shop

and bring it back in line with the national average,

they could save an annual £7,680.

That is a massive saving.

But it's nowhere near enough to get the family back into the black.

So, next, Sarah wants to tackle the amount Ian and Angela

spend on treating their family and friends.

She's invited Angela's son, Toby, his fiancee, Catherine,

and his future mother-in-law, Helen, for a financial heart-to-heart.

They have no idea Angela and Ian have so much debt,

so this might get awkward.

You might sort of wonder why you're all here.

But, as you probably know, Angela and Ian are going to try

-and clear off some of their debts.

-OK.

And there's a lot of evidence that if family are involved and know what

the situation is, it's much more effective,

-cos you can all keep each other on-track.

-OK.

Time for the family to hear some home truths.

I've got a couple of envelopes here.

One is, we call it luxury spend,

but it's really how much they spend on family presents and things.

-I'll hand that to you, Toby.

-Yep.

Have a look at it. Take it out and then tell us what the figure is.

£10,500.

These two are generous to a fault.

But it's not doing their bank balance any favours.

There's lots of us and they're very generous.

You'll get repeated phone calls, "What do you want?"

And then you'll go, "Nothing, don't worry."

"No, honestly, what do you want?"

And then they'll keep barraging you with phone calls

until you have to give a gift that you want.

Or they'll just give you money instead.

This Christmas, they gave us money as well as gifts.

There are going to be some tough choices

and some things you probably don't want to cut back on.

But if you were to have no present for your birthday

but you saw your family, genuinely, would it bother you?

Genuinely, no, it wouldn't bother me.

It doesn't make my birthday.

Spending time with my family makes my birthday.

How would you feel if you had, you know, much cheaper presents?

I'm not really that bothered because I have what I need now.

Sarah's not suggesting they stop giving presents completely.

But if Ian and Angela cut back on two out of every three gifts

they buy, they'd most likely save themselves up to seven grand a year.

But all that's just for starters.

Later in the programme, as this Sunday roast showdown continues,

the whole family hears just how big Ian

and Angela's debts have now become.

That's a very, very large number.

Sarah Pennells is with us now,

along with psychologist Dr Gorkan Ahmetoglu.

Sarah, if we start with you first off.

I mean, a lot of people watching will really empathise with Ian

and Angela's situation, won't they?

I think you're absolutely right, because although it's clear

some people get into debt just by spending too much money,

for a lot of people it's actually a change in their life

circumstances that tips them over into debt.

I think the issue now is that they have got a level of debt that,

if they don't deal with it,

it could cause real problems further down the line.

So, despite being in debt, they were still able to borrow more?

That's right. The way the credit rating system works is

if you're able to manage debts, even if

you're not necessarily paying off a large amount of it,

the lenders look at you as somebody who can cope with that

-level of debt.

-This is how people are getting caught out.

That's right. I think some people think that actually

they're being validated by the bank or the credit card company.

"If the credit card company thinks I'm a good risk and they think

"they can lend me money, then surely everything must be OK."

The problem is, if you're not paying down that debt,

especially on credit cards, the interest rates can be high

and it can be years before you can be debt-free.

Gorkan, we're going to come to you now.

Ian and Angela, as we saw there,

they kept their family in the dark about those debts.

Now it's out in the open though,

do you think that will affect their spending habits?

I think that it's possible that it does affect their spending

habits in a positive way.

So it can act as a motivator, a trigger really,

where they're waking up to their undesirable reality.

I think it also depends on the coping strategy really.

We know that a lot of people that are in debt actually take

financially flawed decisions.

So they would make incorrect decisions like borrowing even

more or paying off smaller debts rather than the bigger debts

which have bigger interest rates.

There's an awful lot of families who, in this situation,

have managed to juggle debts but still continue to spend.

Why is that?

Again, I mean, one reason is the avoidance factor.

We try to not think about the debt.

Another reason is that actually spending feels good.

So we are actually thinking about it as a coping mechanism in itself.

It's a bit like obesity,

where people will eat even more to feel better in the short term,

-even though there are long-term negative consequences.

-Yes.

So, we're very short-term minded in a situation like that.

Sarah, what would your advice be to anyone watching?

Well, first of all, don't assume that because you can make

the payments, the minimum payments on your credit card for example,

that you're doing enough.

Secondly, try and take a step back from your situation

because if you're too close to it,

it can be difficult to make the right choices.

And don't bury your head in the sand.

It's such a cliche, but debt advice charities that I speak to

tell me that people often struggle with the debt on their own

for months and months before they approach someone for help.

The longer you leave it, the fewer options you're likely to have.

Get help and get free help from a debt advice charity.

Thanks, Gorkan. Thanks, Sarah.

Now, despite the fact that household debt is on the rise,

it seems that we just can't stop spending cash.

Yes, the nation's overflowing wardrobes are a testament

to our love of shopping.

However, there is a way to get a whole new look on a budget or,

in fact, no budget at all.

A self-confessed compulsive shopper.

Leah can burn through as much as £500 a month

on new clothes and handbags.

I absolutely love a bargain.

So I'm very guilty of going shopping in the sales,

impulse buying things, and then never wearing them.

You know, if there's something that I want,

I definitely will just buy it.

I really think it's time I need to rein in my spending

because we are saving for a house.

Well, we can help with that

by introducing Leah to an increasingly popular

alternative to hitting the shops.

It's called swishing.

And with any luck, it will give her the same buzz she gets

when she buys something new.

But without the hefty price tags.

Instead, she'll go to a clothes swapping event,

that's the next best thing to a shopping spree,

where a brand-new wardrobe only costs the entry fee.

You just bring something you no longer wear,

then exchange it for something new to you.

Time for a wardrobe clearout, Leah.

At the moment, I've got

so many clothes I've actually broken my wardrobe.

As you can see, my rail has fallen down because it's too heavy.

So, every morning when I'm looking for things,

I just have to pull everything out.

The swishing phenomenon kicked off in the US around ten years ago

and now thousands of women in towns across the UK have become hooked.

Some events take the form of parties.

And as Leah arrives at her first one in North London,

she can immediately see the attraction.

Normally on a Saturday, I'd probably be somewhere,

a really busy shopping centre.

To be here, it's a much nicer vibe.

And it feels already like a nice way to shop.

Swishing etiquette requires everyone to bring at least one quality item

they'd be proud to pass on.

That's definitely not a problem for Leah...

16 items.

..who's brought quite a few.

-So, today I could walk away with 16 items?

-Yes.

-Thank you.

-Thank you.

And with the swish officially open,

the thrill of finding new clothes can begin.

By swapping instead of shopping...

I like them, but they're too big.

..Leah's joining the ranks of hundreds of regular swishers

who rate the experience more highly than a trip to the high street.

I love the access to all kinds of different fashion.

You'd pick up things that you wouldn't normally pick up

if you'd go into a store.

I love shopping, shopping, shopping all the time.

And this is a perfect guilt-free way of shopping, in a way.

It feels a bit like, yeah, like treasure hunting.

Not only is swishing a fun

and social way of making the most of your cast offs...

I've got a friend who'd absolutely love this,

so I think I'm actually going to get it for her.

..swapping unwanted clothing is designed to cut waste,

as expert swisher Diana explains.

Swishing is a way to reduce the amount of clothing

going to landfills. So, right now,

over a million tonnes of clothing are going into UK landfills.

So it's a way to kind of reduce our impact on the environment,

but a way to also kind of not feel that

feeling of looking at your bank account after a big spend.

Clothes swaps like this one have prevented around 200,000 kilos

of clothes from ending up in the bin.

And savvy shopper Leah is quick to spot some fashion must-haves.

I've just found a jumpsuit.

Quite a nice winter coat.

Yeah, I like that.

I'm definitely getting the same sort of thrill out of shopping,

but I'm not actually spending any money, which is amazing.

They keep putting new stuff out.

Like, this clutch bag wasn't here five minutes ago.

I'm shocked that, you know, things that I've actually been looking

for in shops that I probably would have paid, you know, £50, £60 for...

I've just got on my little card.

If you can't see any swishing events in your area,

there are plenty of websites full of tips

on how you can organise your own.

And as the event draws to a close...

Thank you.

..is Leah a convert?

I didn't realise I'd enjoy myself this much.

I'm just really pleased that my clothes that

were in my wardrobe at home,

that were just sitting there for years, have actually been put

to quite good use and I've got some value out of them.

I'd definitely recommend it to others.

In fact, when I leave today, I'm probably going to ring

one of my friends and book it in for next month

because I really think it's a fun way to shop.

Oh, I love the idea of swishing.

I've been talking about doing it with my girlfriends for ages,

so that's really inspired me to have a go.

Now, joining me at Leicester Market is Michelle,

whose wardrobe used to be overflowing with clothes,

shoes and bags. So what's changed?

Well, everything, really.

Because now I'm embarking on a no-spend year.

DENISE GASPS

Which is what it is, really.

I'm actually not spending any money for an entire year.

No money at all?

Other than my mortgage and my water rates, council tax and food,

things I have to pay out for in order to live.

So what prompted this dramatic change?

I want to minimise my outgoings, my bills.

My biggest bill is my mortgage.

And I decided every penny that I save, I'm going

to put it towards my mortgage, pay it off earlier,

and be financially free, hopefully,

much sooner than the 25 years the bank would like me to be free in.

You've got to be incredibly disciplined to do

something like this. And you've even got your husband involved.

Yeah, well, my husband was involved with the minimalism

aspect from the start. And he's sold just as much stuff as I have.

But he's opted out of the actual spending challenge

because he's not as bonkers as I am. So he's living his life.

The only thing he is involved in

when it comes to the spending challenge,

is kind of a challenge within a challenge,

which was to get our food bill down to the lowest amount that we

possibly could. So, three meals a day for both of us,

plus our toiletries, plus cleaning products for the house,

fabric softener, things like that.

-We've managed to get that down to £35 a week.

-Wow.

How have you done it?

Just small things like buy a flask,

don't buy coffees when you're out and about, make shopping lists,

batch cook, do all those sensible things that I'm

sure our grandmothers were doing decades ago.

What's been the hardest thing so far?

Because I'm wracking my brain, thinking, "What could I do without?"

And there's quite a few things that I'm thinking,

"There's not a chance I'm going to give that up."

So what's been the hardest thing for you?

The hardest thing to give up isn't actually a thing.

It's more of experiences.

So every time that I've maybe missed a night out with my friends

and my family cos I can't buy a ticket to go to a gig or a play.

And now people are starting to book their summer holidays,

I'm really starting to get quite envious.

For a lot of people this would be quite an extreme way to live.

But what advice would you give them to just rein it in a little bit?

I don't think everyone can just go on a no-spend year.

It is a bit of an extreme thing to do.

But I think that people can have their own little challenges.

Have a look at the area you know you spend a lot of money in,

whether that's clothes, whether that's gadgets,

whether it's money down the pub,

and what I'd suggest is maybe even do a miniature no-spend

ban for yourself.

So you'd maybe go, "OK, I'm not going to spend any more

"money on clothes, just for the next month."

I'm sure you'll realise that you probably don't need to spend as much

money as you can, and that you'll make a significant saving yourself.

Great advice there, Michelle. Thanks very much.

Now I'm going to try and find out what the people of Leicester

could not live without.

So I took a little butchers around.

-Hello.

-You all right?

-Are you guilty of overspending?

I spend a lot of money on music, drumming gear. So, yeah, I am.

And if you had to do without it,

how long do you think you could last for?

Drumming, I could probably last a little while without it.

But music, probably not. If I hear a new song, I buy it instantly.

Yeah, that's the kind of way I am.

Are you a bigger spender? And if so, what do you spend on?

-My granddaughter.

-Your granddaughter?

-Yes.

-How old is she?

Two-and-a-half years.

Everything... I see things and I just buy them.

Clothes, shoes, toys. I can't resist.

I go by shops and see them and I think,

"I can just see Avery in that. I must have it."

So I couldn't do without that. No.

Clothes occasionally. And I go on holidays.

If someone told you to give those up for about a year, could you do it?

No, I don't think so. No, I wouldn't.

What do you spend your money on?

-Games.

-Games? What, video games?

-No, board games.

-Oh, board games?

-Yeah.

-If someone said to you, "Do without that for a year,"

-could you do it?

-No.

-No, it's too much fun.

-OK.

Think of the laughs you can have and the arguments that you have

when you catch 'em cheating.

I do spend quite a lot of money on chocolate and stuff like that.

Guilty pleasures of life, eh?

If someone said to you that you had to give it up for a year,

-give your chocolate up, what would you say?

-Oh...

Oh, I don't know.

I don't think I'd answer that question, I'd just walk away.

I couldn't give up chocolate for a year. No, no, no.

Well, it seems the people of Leicester aren't quite ready

to live Michelle's minimalist lifestyle just yet.

I'm pretty certain that Michelle would agree with that old cliche -

money can't buy you happiness.

But the truth is, a recent survey said it can.

Well, sometimes, at least.

You see, according to the boffins who did the research,

happiness levels aren't so much about how much cash you've got,

but more about what you're spending your money on

and if what you're buying suits your personality.

So would having more cash make you happier?

I think money can buy happiness because I'm a lot happier when

I've got money and I've never seen a sad person on a jet-ski before.

So...

I don't think money's everything, but it definitely, definitely helps.

I think it makes life easier.

I don't think it makes you happier necessarily.

But I think it does make things in life easier

that sometimes can be a struggle.

I guess it depends what you actually do with it, really.

I do think it can, in certain situations.

I mean, it depends, really. Like, for homeless people,

I think money would bring them more happiness.

But for people who have money, I don't think it can bring

any more happiness than they've already got.

I haven't got any money and I think I'm pretty happy. So... No.

All my uni fees being paid...

That right now, yeah, that would make me happy right now,

actually, yeah.

Happiness comes from having a good relationship

and being happy in life.

Doing things that make you happy. Working where you want to be.

Doing things that you want to do.

People all over the world have got different attitudes to money.

Some spend it, some save it.

Leicester's Narborough Road is a microcosm of the globe.

It's been voted Britain's most diverse street.

Academics from the LSE have discovered

there are shopkeepers here from 23 different countries.

Let's go and talk to some of them.

-Merhaba.

-Merhaba.

-Hello.

-Are you from Turkey?

-I am from Turkey.

Can I ask you about attitudes to money

and what main differences you've noticed between Turkey and here?

I think people in Turkey tend more to save some money.

But in the UK, people are more

spending money on their holidays, going out for food.

What about mortgages? People owning their own property or renting,

a comparison between Turkey and Britain.

What are people more likely to do in Turkey?

In Turkey, some of the people buy their properties in one go,

rather than mortgage.

So from what you're saying there,

quite often people will buy a house over there that they'll pay cash?

Yeah, if I had the funds, for instance, now and go to Turkey

and want to buy a house, I would buy it straightaway.

-Tesekkur ederim.

-Bir sey degil.

-Gule gule!

-Gule gule!

What's your heritage? Where are you from?

I'm originally from India, but I was born in East Africa.

Can I ask you about your attitude to spending?

Are you a cash, credit card, or a bit of both man?

I'm a bit of both man at the minute. I never used to be.

But my accountant told me, "You need to build your credit history

-"to get a mortgage, to get a loan."

-Good for you.

Moneysaving advice, what would it be?

Always compare. Electric bill, gas bill, everything, always compare.

Insurance liability, everything, always compare.

-Shop around, really.

-You have to.

-Hello, what's your name?

-Wicek.

-With a name like that, I'm assuming you're Polish?

-Yes, I am.

Can I be a little bit personal and ask you about your money?

Are you a spender or a saver?

I'm a saver, definitely.

What do you think the Brits are like compared to the Polish people?

It's more common for the Brits to take loans

and use their credit cards whereas, I would say,

Polish people will think twice before getting into a loan.

You're obviously a very shrewd cookie,

so give me your best moneysaving tip.

I would say, make sure that you only buy stuff that you need.

Don't spend money on the stuff you don't need.

As a nation, do you think us Brits are guilty of that?

-I would say yes. And the ability to spend, let's be honest.

-Yeah.

And you're good at it.

I tell you what, you've hit the nail on the head.

I think we're the best in the world at it.

Everyone's been very open talking about money today, which is

something one debt-ridden family we met earlier

could do with taking note of. Let's see if we can help.

Ian and Angela are super close to their six children.

But raising their big family has been hard going on their finances.

Every time the kids needed school shoes or uniform or

anything like that, then it ended up going on a card.

I had about two or three jobs in one go

and began to accrue using credit cards, remortgaging,

trying to make ends meet. We never caught up, really.

After a double whammy of disputed building work

and the cost of visiting a terminally ill relative abroad,

their debts have spiralled out of control.

So we sent in personal finance expert Sarah Pennells to help.

And her first task was totting up just how bad things have got.

I actually worked it out as being over £101,000.

-How does that make you feel?

-Dreadful. Really bad. Really bad.

Sarah reckons they'll stand a better chance of becoming debt-free

with the support of their family.

So she's invited son Toby, his fiancee, Catherine, and Catherine's

mum, Helen, to share a nice roast dinner and some home truths.

She's broken down how much Ian and Angela owe,

and put the key numbers inside a series of envelopes

ready for Toby to digest along with his dinner.

I think it's time for another envelope.

This one has got the figure in it for the total amount that Angela

and Ian owe in loans.

-So open it up.

-OK.

-Have a look. Tell me what do you think.

-It's £30,228.

-These are loans to pay off other debts.

-Yeah, OK.

Wow, yeah. It's...it's a large amount of money to owe.

So, this one here. Nearly the last one.

That's everything they owe so far on credit and store cards.

Putting the burden on me now. Wow.

It's £71,275.

That's a very, very large number.

-Over £100,000 in...

-Our last envelope. Total debt.

Saves me the maths.

THEY LAUGH

So it's £101,503.

That is a large amount of money now.

This hasn't been the easiest of family gatherings for anyone.

But Sarah hopes that by opening up to their nearest and dearest,

Angela and Ian can take the first steps on the road to

financial recovery.

Having heard about how much your mum and dad owe,

how does it make you feel?

Now I know not to get into debt, otherwise I'll end up like them.

Angela, how does it make you feel

when you hear why she doesn't want to get in debt?

It makes me feel bad. I feel like we're bad examples.

But, if nothing else,

-it's shown her that this is not the right way to go about things.

-Mm.

Don't be too hard on yourself, Angela.

You're not alone in running into the red.

As a country, we're more in debt than ever before,

with the average UK household now owing close

to £10,000 in personal loans, credit cards and overdrafts.

So it's no wonder all this has struck a chord with Toby's

future mother-in-law, Helen.

I constantly consolidate my debts, pay off my credit cards,

and then it all starts again.

So I'm on the same spiral.

Recent figures show that around two million

people are in arrears on their credit cards with another

two million facing persistent debt they struggle to repay.

This meal has been difficult.

But Sarah's hoping it will be the start of a new chapter

in Angela and Ian's lives.

So, Angela and Ian, how have you found this day

with me coming in, having a look at your finances

and making some suggestions about what you can do?

It's not been an easy day because we're revealing...

A lot of people don't talk about debt because it's embarrassing.

It's a bit mortifying. It's...

But it's reality.

And I think once you voice it, you've got to do something about it.

I actually think you've been really brave. I really do.

And being open about it as well, which is

something that most people would really rather not do.

I think it's a really tough thing to do,

but I do think that's going to be part of your solution.

But Sarah knows that drastic action is needed.

So she's brought Angela and Ian to London

to meet three top financial experts.

Mortgage broker David Hollingworth,

bankruptcy expert Louise Yates

and debt advisor Jane Clack.

We're a little bit nervous cos we're not quite sure what to expect.

But at the same time,

we're also really interested to see what options there are

and what opportunities there might be for us

to actually start getting control of our lives and...

-Able to move forward, really.

-Moving forward, yeah.

So, Angela and Ian, welcome.

I've brought you to this beautiful, old bank vault.

You might be wondering why. But the reason is,

to kind of take you away from your home environment and away

from maybe some of the emotions that are associated with that.

You're going to meet the experts face-to-face today.

So, meet them one by one.

And hopefully they'll come up with some helpful solutions.

So I will leave you to it.

-And the very best of luck.

-BOTH:

-Thank you.

The size of what they owe means there's no guarantee

any of these experts will be able to help.

First into the vault is debt advisor Louise Yates,

who's been looking at whether becoming insolvent

and filing for bankruptcy would be an option of Angela and Ian,

as it can be for others.

If you were to go down an insolvency route,

that has serious repercussions.

The impact immediately of going into an insolvency situation is

that your credit rating pretty much deteriorates.

And it takes about six years to build that back up again.

That has serious repercussions for you guys

in terms of your mortgage and getting onto new mortgage products,

remortgaging in the future.

Filing for bankruptcy would clear their debts, but their assets,

such as their house, would become vulnerable

and may even be repossessed.

So this isn't the right option for them.

Next expert through the vault is mortgage broker David Hollingworth.

-Hi.

-Hello.

-I'm David.

-Ian.

-Hi, nice to meet you, Ian.

He's been looking at the possibility of switching to a better mortgage

to save some money.

However, there would be a heavy penalty involved.

Now, looking at your mortgage, I think that that penalty,

there's no way you're ever going to save that back by switching now.

It could be getting on for £6,500 or more, I think.

So there's no huge savings to be made there,

-which is the bad news.

-BOTH:

-OK.

So, for now, switching to a different mortgage isn't

a good idea for Angela and Ian either.

In fact, David thinks that due to their high debt, lenders might

be reluctant to let them remortgage when their current deal expires.

One more reason to sort out their situation quickly.

Maybe there will be better news from the third and final expert -

debt advisor Jane Clack.

She's been pouring over the couple's finances,

and by the looks of things, she means business.

You know, if we talk about your aspirations.

You want to become debt-free, don't you?

-Yes, we do.

-I've got some good news for you.

And I'm not beating about the bush here.

If you two concentrate on this hard,

you could be debt-free in three years.

-Fantastic.

-Debt-free.

Hold your horses. Did I hear that right?

You're in a wonderful position, you really are.

You've actually got some money you can be throwing at the debt.

So I would really suggest that you go at it hell for leather this year.

Yep?

Jane's drafted a recovery plan for Angela and Ian.

And key to it is paying off what they owe on their credit cards.

Both of them have good jobs

and they've a combined income of more than £90,000.

But like an estimated 1.5 million other people,

they typically only make the minimum payments

when paying off their various credit cards.

That's not the most effective way to do it.

So Jane is recommending a very different approach.

On your credit cards, the interest rate can vary.

And it's every month on what the balance is.

So the more you can reduce the balance, the less interest you pay.

This is a structured plan to get your debts

repaid at a rate you can afford.

You are in control. OK?

The more your debts get down,

the more you're able to look at repaying your mortgage.

-OK.

-And it will really stand you in good stead.

-OK. Thank you.

-Pleasure.

Jane is convinced that if the couple cut down their household spending,

they could use what they've saved to make more strategic

credit card payments that gradually wipe out their debts

rather than simply keep them at bay.

It won't be easy, but if they can stick to that,

whether it takes three or five years,

a debt-free future isn't that farfetched.

Angela and Ian, she actually said you could be debt-free

in three years, which I thought was quite extraordinary.

-It's hard to imagine.

-Yeah, it is hard to imagine.

And it would be lovely if that does happen. Um...

And hopefully it will.

So this idea of really cutting back

and throwing as much extra money as you can at the most expensive

cards, without being too brutal about it,

but realistically, that's the only option you've got.

Yeah, I think it's pretty clear to us now,

having been through this exercise, that the focus has to be on

paying down the most expensive cards.

Do you now feel like,

"Right, we're going to have to make these changes,

"bring all the family on board, and make sure

"we can stick to it over the longer term, over the few years"?

-Definitely.

-Yeah.

-We'll definitely want to do those changes.

-Yeah.

I think the family will be fine. They'll be quite happy about it.

I think, you know, it's up to us to make sure that we stay in control.

Angela and Ian aren't fully convinced on the timescale

for becoming debt-free.

But not it's down to them to make it happen.

And the key to paying off what they owe will be

keeping their spending down, with the support of all their family.

When you are debt-free, let me know cos I'll help you to celebrate.

But I really wish you the very best of luck.

-Thank you.

-Thank you very much.

Sarah is back with us now.

Sarah, Angela and Ian seem so shocked by everything.

How are they getting on now?

I think, as you say, it was a big shock.

Not just in terms of the final total they owed, but what the

consequences could be of not managing to get on top of this debt.

So I think where they are now is,

they're just processing the advice that the experts gave them,

and trying to make sure that the next steps they take are

sustainable and they can deal with the debt in a way that suits them.

Now, they've got used to a certain lifestyle but they're going

to have to really adjust if they're going to make these changes.

That's right. If they are going to pay off their debt,

they're going to have to make some fairly significant changes.

And that's going to be tough.

But I think the key is to make sure that they get

support from the whole family.

And that they do focus on the end goal.

Because they can't just make cutbacks for a few months,

-this could take them several years.

-Yeah.

There's probably a lot of people right now who

feel like their debts are spiralling out of control.

So what would be your advice to them?

I think the first thing is to actually add up how much you owe.

The second is to try and get your family and friends involved,

close friends, so that they can keep you on track as well.

Don't hide this debt problem away.

Is there anywhere you can get free advice?

I think it's really important the advice you get is free.

Now, there are a number of debt advice charities that will

give you free advice.

There's National Debtline, there's Citizen's Advice,

and there's StepChange.

And there's another free provider of debt advice called Payplan.

I think the worst thing you can do if you're in serious debt problems

is to pay somebody to get you out of it.

-Thanks, Sarah.

-Thank you.

Now, if you'd be interested in having one of our experts

round to tackle your debts,

contact us at...

And in the meantime,

here's where to find plenty of tips on how to budget.

Our website has everything you need to sort our your spending.

We've teamed up with the Money Advice Service to bring you

easy to use moneysaving tools to plan your budget,

calculate the cost of your car or credit cards,

and give your money a complete health check.

Download them at...

..where you can also take our interactive spending test.

And you'll find plenty more tips

and advice to keep your finances on track.

Sarah is still with us to answer some of the questions we've

had from the people of Leicester.

Yazza says, "I keep getting pestered by cold-callers.

"Is there anything I can do to stop them?"

I completely agree with Yazza.

I get pestered by them as well and it's a real problem.

Now, a couple of months ago, the government introduced a new rule

which said that all companies that cold-call must display their number.

So they can't hide behind that sneaky withheld number trick.

I'm not convinced that's going to put an end to cold-calling.

-Nor me.

-The first thing I would suggest is to register with the

Telephone Preference Service, which is free to do,

takes 28 days for your registration to go through.

The second thing is to be really careful about who you give

permission to, to actually pass on your details,

or to use your details for marketing.

And then, finally, if you're still getting lots of calls.

And if they're causing you problems, if it's a landline,

there is call-blocking technology that you can buy.

Some of it does get very good write-ups.

Now, Emily says, "I've inherited some money.

"Should I pay off my student loan or invest it?"

This is another really good question.

Now, normally if you inherit some money

and you've got expensive debts such as credit card or personal loan,

the advice would be to pay that off.

With student loans, it's a bit more complicated

because they're viewed as cheaper loans

because the interest rate is linked to inflation.

But crucially, the amount that you pay off doesn't depend on how

much you borrowed but what you earn once you graduate.

She needs to think about how much she might earn through her

working life and therefore whether she should pay off the debt.

And whether that inheritance could be used for something else.

If she wants to get a deposit for a house,

then maybe there's a better use for that money.

It isn't a simple as, say, pay it off to be debt-free,

which often is the advice if you are in debt.

Circumstances are different and it depends on yours, doesn't it?

-Very much so. Yes.

-Sarah, thanks a lot for your advice.

-There's been some little nuggets in there.

-Thank you.

And big thanks to all our guests

and, of course, to you at home for joining us.

And we hope that you've picked up some useful tips.

-Until next time, cheerio.

-Bye-bye.