0:00:00 > 0:00:00As it runs into cold air, more snow for a time in parts
0:00:00 > 0:00:01of Scotland and northern England.
0:00:01 > 0:00:04Time now for inside out which looks at why cancel debt tax is rising at
0:00:04 > 0:00:12an alarming rate.Here is what is coming up on tonight's programme. As
0:00:12 > 0:00:17we count the cost of a Christmas spending binge, we find out how to
0:00:17 > 0:00:22get out and stay out of debt will stop now is the time to cut up my
0:00:22 > 0:00:33credit card. Don't sit on it. There is no doubt that cannot be sorted.
0:00:33 > 0:00:40Why cancel tax debt is at an all-time high.I don't know how that
0:00:40 > 0:00:47happened.The baby boomers funding their retirement in surprising new
0:00:47 > 0:00:52ways.If you can spot a gap in the market then it is never too late to
0:00:52 > 0:00:56start your own business, become successful and you might even help
0:00:56 > 0:01:06the economy.
0:01:09 > 0:01:13Christmas shopping sprees will offend many of us into the red. Here
0:01:13 > 0:01:16in the UK more than 8 million of those are struggling to cope with
0:01:16 > 0:01:21debt. How do we free ourselves from the debt spiral and gets savvier
0:01:21 > 0:01:36about the money we spend and save as the.I'm in Birmingham today with
0:01:36 > 0:01:43£500 to see if people are spenders or savers. If I give you a pound
0:01:43 > 0:01:52would you spend it save it?I must spend. I need a drink.I haven't got
0:01:52 > 0:02:00enough money to save.I'm catching up with a debt charity. They are
0:02:00 > 0:02:05hosting a road show here in one of Birmingham 's largest shopping
0:02:05 > 0:02:12centres. January is when we get a lot of calls.People are spent and
0:02:12 > 0:02:17enjoy themselves and really not connected with the consequences in
0:02:17 > 0:02:24the weeks afterwards when the bills start coming in.Christmas has been
0:02:24 > 0:02:31difficult and I am in debt.Our aim is to try and break the tibial about
0:02:31 > 0:02:40spending money. Once you get it out in the open and opening the post,
0:02:40 > 0:02:46that a wall just evaporates.Out of the £501 coins we are given out
0:02:46 > 0:03:05family people decided to save?148 would save but 352 would spend them.
0:03:05 > 0:03:11Statistics show we are a nation of spenders. The average household has
0:03:11 > 0:03:15£14,000 worth of non-mortgage debt. And one in three households in the
0:03:15 > 0:03:20UK has no savings whatsoever. Getting out of debt isn't easy. I
0:03:20 > 0:03:26should know, I've been there. But a unique project in London could have
0:03:26 > 0:03:32a solution. I'm in the London borough of Newham which has the
0:03:32 > 0:03:36highest level of problem debt in the country. One in four people here is
0:03:36 > 0:03:43behind on a bill or credit commitment.Morning.Since Money
0:03:43 > 0:03:49Works opened two years ago, they've seen over 3,500 Newham residents use
0:03:49 > 0:03:56the service.Money Works was set up by the mayor of Newham. Clients had
0:03:56 > 0:04:03gone into his surgery and had a financial crisis. They ended up
0:04:03 > 0:04:08going to loan sharks. He thought what can I do for the residents to
0:04:08 > 0:04:16offer more affordable crows it.-- cred I -- credit.Let's see what
0:04:16 > 0:04:42happens?A good sum, about 200. What's special is that Money Works
0:05:36 > 0:05:45A lot of customers come to those... It's an eye-opener to them.It's
0:05:45 > 0:05:55just ridiculous, all that money. Michael was given practical advice
0:05:55 > 0:06:05alongside a loan to pay off his debts. We...We offered him alone
0:06:05 > 0:06:13and he was £1213 better off.Michael is now debt free.It worked
0:06:13 > 0:06:21wonderfully.Money works is proving so successful, other councils are
0:06:21 > 0:06:31looking at doing the same.
0:06:34 > 0:06:41Now is the time to cut up that credit card. Fantastic. We have had
0:06:41 > 0:06:49people burst into tears because of the emotional hold that the idea of
0:06:49 > 0:06:55credit has got with someone.It might come as a shock to most of us,
0:06:55 > 0:06:58but by seven years old children have already formed their financial
0:06:58 > 0:07:04habits. I have come to this school in Lincolnshire to meet an expert
0:07:04 > 0:07:17team of super savers.Hello, please may I... I am a bank manager. I look
0:07:17 > 0:07:22after everyone's money and make sure that nothing goes wrong with it.I
0:07:22 > 0:07:26am the assistant bank manager. I have two supervise all the cashier
0:07:26 > 0:07:32's and make sure no one is misbehaving.When we first started
0:07:32 > 0:07:35the project we ask children where they think money comes from. They
0:07:35 > 0:07:40think it just comes from a cashpoint Redhill. They didn't understand
0:07:40 > 0:07:45which is why we introduced the idea that you need to work for your money
0:07:45 > 0:07:51and you are rewarded.Children can earn by doing well in spelling and
0:07:51 > 0:07:57times tables, working in the bank and for special achievements.Can I
0:07:57 > 0:08:09deposit them please.It is worth about 3p but it is worth more to
0:08:09 > 0:08:15these children. They can deposit it in the bank of take some out and
0:08:15 > 0:08:21spend it in this store next door. I'm going to look and see what I can
0:08:21 > 0:08:33get.Children often save for over a year before they buy anything. They
0:08:33 > 0:08:39say over year I will get extra money.It is clear to these children
0:08:39 > 0:08:44that saving big rewards.
0:08:44 > 0:08:48Is that that teddy? Lovely, shall we buy it?Yeah.What we're hoping is
0:08:48 > 0:08:51that children are actually understanding and experiencing the
0:08:51 > 0:08:57process of saving and learning to wait for things.I'm going to call
0:08:57 > 0:09:05him Tom.Back at the road show, and the day is coming to a close. How's
0:09:05 > 0:09:09it been today?We're seeing lots of debts, but the most important
0:09:09 > 0:09:13message is don't sit on it. Get help. There's no debt we've yet seen
0:09:13 > 0:09:20that can't be sorted. Now then, still to come on tonight's
0:09:20 > 0:09:24show, if you look at the impact of all those people starting their own
0:09:24 > 0:09:42businesses, who are aged 55
0:09:57 > 0:10:11Is this approach too heavy-handed? For centuries it bars held traitors,
0:10:11 > 0:10:21thieves and debtors. For debtors the only way they would walk free was to
0:10:21 > 0:10:31pay up in full. But how to do that behind bars? The rat man, unable to
0:10:31 > 0:10:37pay, it wraps until he died. This is a grim place so why is it that the
0:10:37 > 0:10:46leading London barrister thinks that councils are using similar tactics?
0:10:46 > 0:10:52This problem is growing. Some local authorities are going down the road
0:10:52 > 0:10:59of bankruptcy, making people insolvent which hugely multiplies
0:10:59 > 0:11:03their debt with the consequences that they lose their homes,
0:11:03 > 0:11:08businesses. It is utterly devastating. In some ways it is
0:11:08 > 0:11:17worse than being jailed for council tax default.I lose sleep I am
0:11:17 > 0:11:21anxious, I have a lot of anxiety. Some people have actually committed
0:11:21 > 0:11:31suicide.After killing himself on the railway. His home had been taken
0:11:31 > 0:11:39away for failing to pay £1350 over council tax debt. Peter was mentally
0:11:39 > 0:11:44ill. Nobody realised this at the time. He was literally hounded to
0:11:44 > 0:11:48death over what was a relatively small amount of money £1350, which
0:11:48 > 0:11:53was inflated to over £70,000 by the time of his death. It was all cost.
0:11:53 > 0:11:58He had paid his council tax. This was all cost.I'm seeing this kind
0:11:58 > 0:12:03of stress repeated every week now around England and Wales.My court
0:12:03 > 0:12:09case. Contact us now to avoid further action and costs.In the
0:12:09 > 0:12:14past two years, court action for council tax debt has risen 40%. Use
0:12:14 > 0:12:20of bailiffs is also up.Notice of removal action, that means we're
0:12:20 > 0:12:26coming to get you.That's your copy there. We've not received any
0:12:26 > 0:12:31payments whatsoever.I'm struggling at the same time. I just want to
0:12:31 > 0:12:35feed my child. I just want to eat.I require payment today. You've got
0:12:35 > 0:12:42just over £1,000 to pay. What are you offering now?97% of us pay our
0:12:42 > 0:12:47council tax bill but debt campaigners claim over 200,000
0:12:47 > 0:12:51bailiff visits were made in London to those who don't.The figures show
0:12:51 > 0:12:54if you look at boroughs across London and, in fact, across England
0:12:54 > 0:12:58and Wales, there's very different practice in different boroughs, it's
0:12:58 > 0:13:03a postcode lottery.Westminster Council send bailiffs out over
0:13:03 > 0:13:1018,000 times. While Havering was a tenth of that. In less than a decade
0:13:10 > 0:13:14Government's grants to councils have been cut by a third.Whoever you're
0:13:14 > 0:13:17looking for it's not me... Westminster and several other
0:13:17 > 0:13:24councils declined to be interviewed. They insist they avoid targeting the
0:13:24 > 0:13:27vulnerable, only using bailiffs when payment plans have failed.I'm
0:13:27 > 0:13:33asking a simple question.Single, unemployed mum Michelle is watching
0:13:33 > 0:13:43her £86 council tax debt spiral.It escalated to £608. 75 from 86. 75,
0:13:43 > 0:13:47yeah I don't know how that happened. It's bad enough to pay that debt and
0:13:47 > 0:13:50then they've chucked that on. I'm thinking if I can't pay that, how am
0:13:50 > 0:13:57I supposed to pay that on top? What is it you want from me?It's the
0:13:57 > 0:14:00councils who decide if Dave the bailiff comes knocking. Is there any
0:14:00 > 0:14:05difference in the way you work between can't pay or won't pay?
0:14:05 > 0:14:10That's not my business. The system does not distinguish at all now
0:14:10 > 0:14:17between the can't payers and won't payers. The council tax has become a
0:14:17 > 0:14:23kind of Frankenstein's monster. For all intents and purposes, the local
0:14:23 > 0:14:26authority is now taking over in terms of council tax by its
0:14:26 > 0:14:30computers. It's the computer which calculates your bill and is in
0:14:30 > 0:14:38charge of every step of the way.One exceptional week, Franklin earned
0:14:38 > 0:14:42£170 on his zero-hour contract job. So the council computer cancelled
0:14:42 > 0:14:47his Council Tax Benefit.They sent me an assessment saying I earned
0:14:47 > 0:14:51£170 a week so I can afford to pay it. I said no I'm not. Some weeks I
0:14:51 > 0:14:55earned £20 a week.Franklin says he couldn't afford the full council tax
0:14:55 > 0:14:59now being charged. And the bailiffs are knocking.I'm trying to better
0:14:59 > 0:15:03myself. I'm diagnosed with heart failure and kidney failure. I have
0:15:03 > 0:15:07multiple organ failure. I thought let me go and get a job for the last
0:15:07 > 0:15:11years and try to better myself, you know. This is the obstacle why
0:15:11 > 0:15:14people don't want to work because of the hassle. Not because they're
0:15:14 > 0:15:18lazy, but because of the hassle that they get from the Government.The
0:15:18 > 0:15:25letter box is jammed up. In some cases it's impossible to get the
0:15:25 > 0:15:28money back, then there's nothing else we can do.Are you finding that
0:15:28 > 0:15:35more and more?Yes. Yes. People haven't got the means to pay.Mike
0:15:35 > 0:15:38Thompson was a book seller until a devastating illness meant he could
0:15:38 > 0:15:44barely work. His council tax debt would take his home and lead to
0:15:44 > 0:16:12recovery costs 30 times the original arrears of 2,900.The Council
0:16:12 > 0:16:14the procreeds. The other £86,000 was swallowed up in
0:16:22 > 0:16:25The local authorities themselves in the great scheme of things lose out
0:16:25 > 0:16:32big time. SnvmAt Hammersmith and Fulham Council they've begun to
0:16:32 > 0:16:34wonder if bankrupting seizure of homes and use of bailiffs is
0:16:34 > 0:16:40working. They claim bailiffs only recover 30% of council tax debt and
0:16:40 > 0:16:44are getting rid of them from April. If a family is trying to keep the
0:16:44 > 0:16:47bailiffs away and prioritises the bill for council tax, they then
0:16:47 > 0:16:51might miss their rental payment and then you're level with a homeless
0:16:51 > 0:16:56family being traumatised. But then presenting the public sector with a
0:16:56 > 0:17:01huge bill in terms of housing and the problems with homelessness.
0:17:01 > 0:17:04First Credit are in charge of Hammersmith's ethical new debt
0:17:04 > 0:17:09collection.We don't add any interest or charges...Like TV money
0:17:09 > 0:17:14advisors, they set up a payment plan.We would never look to pursue
0:17:14 > 0:17:17any bailiffs...I'm hoping for Hammersmith they will end up with
0:17:17 > 0:17:21the same amount of money collected or more, which they can get back to
0:17:21 > 0:17:25the residents. I'm already seeing on cases they've given up on, I'm
0:17:25 > 0:17:28already collecting money on the cases they'd given up on. I know
0:17:28 > 0:17:31that will give them more money back for their residents, which is a
0:17:31 > 0:17:35win-win.Are you worried some people might go out and buy a telly rather
0:17:35 > 0:17:40than pay the council tax if you're ethical?I'm optimistic this will
0:17:40 > 0:17:45work. We are not stopping debt collection. We're just doing it in
0:17:45 > 0:17:51an ethical way.The bailiff industry warn this experiment will back fire.
0:17:51 > 0:17:54The enforcement industry has collected around £650 million worth
0:17:54 > 0:17:59of local authority debt. To dispense with the enforcement service will
0:17:59 > 0:18:05come at a price. I think that in two or three years' time, the coffers
0:18:05 > 0:18:08will be looked at and the question will be asked: Where's the money?
0:18:08 > 0:18:12They come up with all sorts of excuses. You can normally read them,
0:18:12 > 0:18:17whether or not they're lying or not. Well, I can any way.Now ethical
0:18:17 > 0:18:21debt collection in Hammersmith is about to show whether or not the
0:18:21 > 0:18:25bailiffs' knock might, like the climate change, become part of debt
0:18:25 > 0:18:33collecting history. We hear about baby boomers and how
0:18:33 > 0:18:37lucky they are compared to younger, less well off generations. Not all
0:18:37 > 0:18:41boomers are secure enough to put their feet up and let their pensions
0:18:41 > 0:18:45take care of everything. A record number are funding their retirement
0:18:45 > 0:18:57by setting up first time business ventures.
0:19:00 > 0:19:04I'm 62 and I'm still working, whether hosting my radio show on BBC
0:19:04 > 0:19:08Radio London or presenting films like this. I started work at 16. I'm
0:19:08 > 0:19:12freelance, so I don't have a pension. But I often wake up at
0:19:12 > 0:19:15night with a fear of was going to happen when I'm no longer flavour
0:19:15 > 0:19:21the month? Living off a state pension hardly fills me with glee. I
0:19:21 > 0:19:24realise at some point I'm going to have to change my life. I'm not the
0:19:24 > 0:19:28only one. There's a lot more like me.I'm 61 now. You're getting older
0:19:28 > 0:19:32and you're getting less employable. I would like to work for quite a few
0:19:32 > 0:19:38more years.I was unemployable I think because of my age. Every job I
0:19:38 > 0:19:45went for, I was turned down flat. Like many others in our age group,
0:19:45 > 0:19:49Linda and Louise need the money to keep coming in. They decided to take
0:19:49 > 0:19:52matters into their own hands and started up a small business, for the
0:19:52 > 0:19:58first time in their lives. # The best things in life are free
0:19:58 > 0:20:01# But you can give them to the birds and bees
0:20:01 > 0:20:09# I need money... Down on Canvey Island, Linda is running a small
0:20:09 > 0:20:19business making designer wear for dogs.I do collars, leads, coats,
0:20:19 > 0:20:26harnesses, carrier bags, car seats. Sometimes I get up at four, five...
0:20:26 > 0:20:314am or 5am?Yeah, crazy. Because there's a lot to do for one person.
0:20:31 > 0:20:35But it's not financially secure at the moment to employ people or to go
0:20:35 > 0:20:39the next steps. It will do. Basically, if I've got work to do,
0:20:39 > 0:20:44I've got to get up and do it. Most of it is online selling. Which to a
0:20:44 > 0:20:49dinosaur like me, I've had to learn a lot. How about this, look, it's
0:20:49 > 0:20:56lined...Oh, my goodness. It's so snug.Now I'm shipping them out
0:20:56 > 0:21:03everywhere. I've sent off to Las Vegas, Valencia in Spain. So I
0:21:03 > 0:21:07wasn't only going England, Scotland, Ireland, Wales. It's going. When I
0:21:07 > 0:21:13started with this, I started with 79p and a sewing machine. That's. It
0:21:13 > 0:21:16I'm thinking there's no food on the table. Yes, I can go to family. Yes,
0:21:16 > 0:21:23I can go to friends. It wasn't in my nature. They say, oh, what are you
0:21:23 > 0:21:27eating tonight, mum? Oh, yes, I'm having this and that. And literally
0:21:27 > 0:21:31living on toast and getting up the next day and making something to
0:21:31 > 0:21:35sell it. At the end of the day, you've got to rely on yourself. You
0:21:35 > 0:21:40know, that's the way I am. I'm very, very proud and I was like, I can do
0:21:40 > 0:21:44this. # I've been laid off for work, my
0:21:44 > 0:21:49rent is due # My kids all need brand new shoes
0:21:49 > 0:21:53# So I went to the bank to see what they could do
0:21:53 > 0:21:57# They said, sorry, looks like bad luck got a hold on you
0:21:57 > 0:22:02# Money's too tight to mention# There are many like Linda starting
0:22:02 > 0:22:05up small businesses later in life than would be expected. Barclays
0:22:05 > 0:22:08Bank have done a lot of research into this growing trend over the
0:22:08 > 0:22:13last ten years.It's actually really surprising what we found. There's
0:22:13 > 0:22:17been a huge growth in the number of people in their late 50s, even late
0:22:17 > 0:22:2160s who are starting their own business. If you think of people in
0:22:21 > 0:22:24their mid-20s, early 30s, we've seen about 23%. But actually for older
0:22:24 > 0:22:30people, in their late 50s and 60s it's much higher, a 63% growth.
0:22:30 > 0:22:33We've seen this new trend most prevalent in London and the
0:22:33 > 0:22:37south-east compared to the rest of the country. Actually in London it's
0:22:37 > 0:22:41up 89%, higher than anywhere else in the country.One of the reasons that
0:22:41 > 0:22:45many of these new entrepreneurs are willing to give it a go so late in
0:22:45 > 0:22:50life is that people of our age have a whole wealth of life experiences
0:22:50 > 0:23:00to draw upon.
0:23:04 > 0:23:07Not everyone makes the decision to start afresh because they can't get
0:23:07 > 0:23:15a job. Louise was at the very top a hugely successful career.I've been
0:23:15 > 0:23:22a magazine editor for three decades, journalist and editor. I've been at
0:23:22 > 0:23:25magazines like Vogue, Good Housekeeping, I was the editor of
0:23:25 > 0:23:28Sigh couldies magazine.Louise noticed things changing and worried
0:23:28 > 0:23:36that she could become surplus to requirement.In journalism, it's not
0:23:36 > 0:23:40entirely but largely a career for younger people. It's going through
0:23:40 > 0:23:45enormous changes because of the internet. I'm from the old school.
0:23:45 > 0:23:49So five years ago, old school Louise decided to take a giant step and get
0:23:49 > 0:23:53out of the world of magazines but surprisingly, the business she
0:23:53 > 0:23:58started up is based purely on the internet.What I decided to do was
0:23:58 > 0:24:06start a site that finds therapists for people, so it's basically using
0:24:06 > 0:24:09an algorithm to match people with the therapist most suited to them. I
0:24:09 > 0:24:15don't literally know how to do that. So of course you use tech
0:24:15 > 0:24:17developers. In this business I employ people. I'm building a
0:24:17 > 0:24:23business that I hope will be a major force and will make money,
0:24:23 > 0:24:28obviously, and we can maybe even sell on.Are you making money?We do
0:24:28 > 0:24:40make money, yes.Great news then that Louise is already making money.
0:24:40 > 0:24:44It turns out, though, that she and others like her are also creating
0:24:44 > 0:24:48good news for the rest of us. If you look at the impact of all of those
0:24:48 > 0:24:52people starting their own businesses, who are aged 55 or over,
0:24:52 > 0:24:57that's worth over £7 billion to the UK economy in any given year. So
0:24:57 > 0:25:00that's really good news for our economic prosperity. It seems that
0:25:00 > 0:25:04if you can spot a gap in the market, have enough focus and get up and go,
0:25:04 > 0:25:08then it's never too late to start your own business, become successful
0:25:08 > 0:25:19and you height even help the economy.
0:25:19 > 0:25:19Her economy.
0:25:19 > 0:25:19Her bulldog economy.
0:25:19 > 0:25:20Her bulldog looked economy.
0:25:20 > 0:25:20Her bulldog looked impressed economy.
0:25:20 > 0:25:20Her bulldog looked impressed with economy.
0:25:20 > 0:25:22Her bulldog looked impressed with that designer gear. That's all for
0:25:22 > 0:25:26this week's Inside Out. Tonight's programme is available on the
0:25:26 > 0:25:32iPlayer. Head to our website bbc.co.uk/insideout and click on
0:25:32 > 0:25:42London. Thanks very much for watching. See you again soon.