How to get and stay out of debt. Why is council tax debt rising at an alarming rate? And the baby boomers starting inventive new businesses to fund their retirements.
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As it runs into cold air,
more snow for a time in parts
of Scotland and northern England.
Time now for inside out which looks
at why cancel debt tax is rising at
an alarming rate.
Here is what is
coming up on tonight's programme. As
we count the cost of a Christmas
spending binge, we find out how to
get out and stay out of debt will
stop now is the time to cut up my
credit card. Don't sit on it. There
is no doubt that cannot be sorted.
Why cancel tax debt is at an
I don't know how that
The baby boomers funding
their retirement in surprising new
If you can spot a gap in the
market then it is never too late to
start your own business, become
successful and you might even help
Christmas shopping sprees will
offend many of us into the red. Here
in the UK more than 8 million of
those are struggling to cope with
debt. How do we free ourselves from
the debt spiral and gets savvier
about the money we spend and save as
I'm in Birmingham today with
£500 to see if people are spenders
or savers. If I give you a pound
would you spend it save it?
spend. I need a drink.
I haven't got
enough money to save.
up with a debt charity. They are
hosting a road show here in one of
Birmingham 's largest shopping
centres. January is when we get a
lot of calls.
People are spent and
enjoy themselves and really not
connected with the consequences in
the weeks afterwards when the bills
start coming in.
Christmas has been
difficult and I am in debt.
is to try and break the tibial about
spending money. Once you get it out
in the open and opening the post,
that a wall just evaporates.
the £501 coins we are given out
family people decided to save?
would save but 352 would spend them.
Statistics show we are a nation of
spenders. The average household has
£14,000 worth of non-mortgage debt.
And one in three households in the
UK has no savings whatsoever.
Getting out of debt isn't easy. I
should know, I've been there. But a
unique project in London could have
a solution. I'm in the London
borough of Newham which has the
highest level of problem debt in the
country. One in four people here is
behind on a bill or credit
Works opened two years ago, they've
seen over 3,500 Newham residents use
Money Works was set up
by the mayor of Newham. Clients had
gone into his surgery and had a
financial crisis. They ended up
going to loan sharks. He thought
what can I do for the residents to
offer more affordable crows it.
cred I -- credit.
Let's see what
A good sum, about 200.
What's special is that Money Works
A lot of customers come to those...
It's an eye-opener to them.
just ridiculous, all that money.
Michael was given practical advice
alongside a loan to pay off his
We offered him alone
and he was £1213 better off.
is now debt free.
Money works is proving
so successful, other councils are
looking at doing the same.
Now is the time to cut up that
credit card. Fantastic. We have had
people burst into tears because of
the emotional hold that the idea of
credit has got with someone.
might come as a shock to most of us,
but by seven years old children have
already formed their financial
habits. I have come to this school
in Lincolnshire to meet an expert
team of super savers.
may I... I am a bank manager. I look
after everyone's money and make sure
that nothing goes wrong with it.
am the assistant bank manager. I
have two supervise all the cashier
's and make sure no one is
When we first started
the project we ask children where
they think money comes from. They
think it just comes from a cashpoint
Redhill. They didn't understand
which is why we introduced the idea
that you need to work for your money
and you are rewarded.
earn by doing well in spelling and
times tables, working in the bank
and for special achievements.
deposit them please.
It is worth
about 3p but it is worth more to
these children. They can deposit it
in the bank of take some out and
spend it in this store next door.
I'm going to look and see what I can
Children often save for over a
year before they buy anything. They
say over year I will get extra
It is clear to these children
that saving big rewards.
Is that that teddy? Lovely, shall we
What we're hoping is
that children are actually
understanding and experiencing the
process of saving and learning to
wait for things.
I'm going to call
Back at the road show, and
the day is coming to a close. How's
it been today?
We're seeing lots of
debts, but the most important
message is don't sit on it. Get
help. There's no debt we've yet seen
that can't be sorted.
Now then, still to come on tonight's
show, if you look at the impact of
all those people starting their own
businesses, who are aged 55
Is this approach too heavy-handed?
For centuries it bars held traitors,
thieves and debtors. For debtors the
only way they would walk free was to
pay up in full. But how to do that
behind bars? The rat man, unable to
pay, it wraps until he died. This is
a grim place so why is it that the
leading London barrister thinks that
councils are using similar tactics?
This problem is growing. Some local
authorities are going down the road
of bankruptcy, making people
insolvent which hugely multiplies
their debt with the consequences
that they lose their homes,
businesses. It is utterly
devastating. In some ways it is
worse than being jailed for council
I lose sleep I am
anxious, I have a lot of anxiety.
Some people have actually committed
After killing himself on
the railway. His home had been taken
away for failing to pay £1350 over
council tax debt. Peter was mentally
ill. Nobody realised this at the
time. He was literally hounded to
death over what was a relatively
small amount of money £1350, which
was inflated to over £70,000 by the
time of his death. It was all cost.
He had paid his council tax. This
was all cost.
I'm seeing this kind
of stress repeated every week now
around England and Wales.
case. Contact us now to avoid
further action and costs.
past two years, court action for
council tax debt has risen 40%. Use
of bailiffs is also up.
removal action, that means we're
coming to get you.
That's your copy
there. We've not received any
at the same time. I just want to
feed my child. I just want to eat.
require payment today. You've got
just over £1,000 to pay. What are
you offering now?
97% of us pay our
council tax bill but debt
campaigners claim over 200,000
bailiff visits were made in London
to those who don't.
The figures show
if you look at boroughs across
London and, in fact, across England
and Wales, there's very different
practice in different boroughs, it's
a postcode lottery.
Council send bailiffs out over
18,000 times. While Havering was a
tenth of that. In less than a decade
Government's grants to councils have
been cut by a third.
looking for it's not me...
Westminster and several other
councils declined to be interviewed.
They insist they avoid targeting the
vulnerable, only using bailiffs when
payment plans have failed.
asking a simple question.
unemployed mum Michelle is watching
her £86 council tax debt spiral.
escalated to £608. 75 from 86. 75,
yeah I don't know how that happened.
It's bad enough to pay that debt and
then they've chucked that on. I'm
thinking if I can't pay that, how am
I supposed to pay that on top? What
is it you want from me?
councils who decide if Dave the
bailiff comes knocking. Is there any
difference in the way you work
between can't pay or won't pay?
That's not my business. The system
does not distinguish at all now
between the can't payers and won't
payers. The council tax has become a
kind of Frankenstein's monster. For
all intents and purposes, the local
authority is now taking over in
terms of council tax by its
computers. It's the computer which
calculates your bill and is in
charge of every step of the way.
exceptional week, Franklin earned
£170 on his zero-hour contract job.
So the council computer cancelled
his Council Tax Benefit.
me an assessment saying I earned
£170 a week so I can afford to pay
it. I said no I'm not. Some weeks I
earned £20 a week.
Franklin says he
couldn't afford the full council tax
now being charged. And the bailiffs
I'm trying to better
myself. I'm diagnosed with heart
failure and kidney failure. I have
multiple organ failure. I thought
let me go and get a job for the last
years and try to better myself, you
know. This is the obstacle why
people don't want to work because of
the hassle. Not because they're
lazy, but because of the hassle that
they get from the Government.
letter box is jammed up. In some
cases it's impossible to get the
money back, then there's nothing
else we can do.
Are you finding that
more and more?
Yes. Yes. People
haven't got the means to pay.
Thompson was a book seller until a
devastating illness meant he could
barely work. His council tax debt
would take his home and lead to
recovery costs 30 times the original
arrears of 2,900.
the procreeds. The other £86,000 was
swallowed up in
The local authorities themselves in
the great scheme of things lose out
big time. Snvm
At Hammersmith and
Fulham Council they've begun to
wonder if bankrupting seizure of
homes and use of bailiffs is
working. They claim bailiffs only
recover 30% of council tax debt and
are getting rid of them from April.
If a family is trying to keep the
bailiffs away and prioritises the
bill for council tax, they then
might miss their rental payment and
then you're level with a homeless
family being traumatised. But then
presenting the public sector with a
huge bill in terms of housing and
the problems with homelessness.
First Credit are in charge of
Hammersmith's ethical new debt
We don't add any
interest or charges...
Like TV money
advisors, they set up a payment
We would never look to pursue
I'm hoping for
Hammersmith they will end up with
the same amount of money collected
or more, which they can get back to
the residents. I'm already seeing on
cases they've given up on, I'm
already collecting money on the
cases they'd given up on. I know
that will give them more money back
for their residents, which is a
Are you worried some people
might go out and buy a telly rather
than pay the council tax if you're
I'm optimistic this will
work. We are not stopping debt
collection. We're just doing it in
an ethical way.
The bailiff industry
warn this experiment will back fire.
The enforcement industry has
collected around £650 million worth
of local authority debt. To dispense
with the enforcement service will
come at a price. I think that in two
or three years' time, the coffers
will be looked at and the question
will be asked: Where's the money?
They come up with all sorts of
excuses. You can normally read them,
whether or not they're lying or not.
Well, I can any way.
debt collection in Hammersmith is
about to show whether or not the
bailiffs' knock might, like the
climate change, become part of debt
We hear about baby boomers and how
lucky they are compared to younger,
less well off generations. Not all
boomers are secure enough to put
their feet up and let their pensions
take care of everything. A record
number are funding their retirement
by setting up first time business
I'm 62 and I'm still working,
whether hosting my radio show on BBC
Radio London or presenting films
like this. I started work at 16. I'm
freelance, so I don't have a
pension. But I often wake up at
night with a fear of was going to
happen when I'm no longer flavour
the month? Living off a state
pension hardly fills me with glee. I
realise at some point I'm going to
have to change my life. I'm not the
only one. There's a lot more like
I'm 61 now. You're getting older
and you're getting less employable.
I would like to work for quite a few
I was unemployable I
think because of my age. Every job I
went for, I was turned down flat.
Like many others in our age group,
Linda and Louise need the money to
keep coming in. They decided to take
matters into their own hands and
started up a small business, for the
first time in their lives.
# The best things in life are free
# But you can give them to the birds
# I need money... Down on Canvey
Island, Linda is running a small
business making designer wear for
I do collars, leads, coats,
harnesses, carrier bags, car seats.
Sometimes I get up at four, five...
4am or 5am?
Yeah, crazy. Because
there's a lot to do for one person.
But it's not financially secure at
the moment to employ people or to go
the next steps. It will do.
Basically, if I've got work to do,
I've got to get up and do it. Most
of it is online selling. Which to a
dinosaur like me, I've had to learn
a lot. How about this, look, it's
Oh, my goodness. It's so
Now I'm shipping them out
everywhere. I've sent off to Las
Vegas, Valencia in Spain. So I
wasn't only going England, Scotland,
Ireland, Wales. It's going. When I
started with this, I started with
79p and a sewing machine. That's. It
I'm thinking there's no food on the
table. Yes, I can go to family. Yes,
I can go to friends. It wasn't in my
nature. They say, oh, what are you
eating tonight, mum? Oh, yes, I'm
having this and that. And literally
living on toast and getting up the
next day and making something to
sell it. At the end of the day,
you've got to rely on yourself. You
know, that's the way I am. I'm very,
very proud and I was like, I can do
# I've been laid off for work, my
rent is due
# My kids all need brand new shoes
# So I went to the bank to see what
they could do
# They said, sorry, looks like bad
luck got a hold on you
# Money's too tight to mention#
There are many like Linda starting
up small businesses later in life
than would be expected. Barclays
Bank have done a lot of research
into this growing trend over the
last ten years.
It's actually really
surprising what we found. There's
been a huge growth in the number of
people in their late 50s, even late
60s who are starting their own
business. If you think of people in
their mid-20s, early 30s, we've seen
about 23%. But actually for older
people, in their late 50s and 60s
it's much higher, a 63% growth.
We've seen this new trend most
prevalent in London and the
south-east compared to the rest of
the country. Actually in London it's
up 89%, higher than anywhere else in
One of the reasons that
many of these new entrepreneurs are
willing to give it a go so late in
life is that people of our age have
a whole wealth of life experiences
to draw upon.
Not everyone makes the decision to
start afresh because they can't get
a job. Louise was at the very top a
hugely successful career.
a magazine editor for three decades,
journalist and editor. I've been at
magazines like Vogue, Good
Housekeeping, I was the editor of
Sigh couldies magazine.
noticed things changing and worried
that she could become surplus to
In journalism, it's not
entirely but largely a career for
younger people. It's going through
enormous changes because of the
internet. I'm from the old school.
So five years ago, old school Louise
decided to take a giant step and get
out of the world of magazines but
surprisingly, the business she
started up is based purely on the
What I decided to do was
start a site that finds therapists
for people, so it's basically using
an algorithm to match people with
the therapist most suited to them. I
don't literally know how to do that.
So of course you use tech
developers. In this business I
employ people. I'm building a
business that I hope will be a major
force and will make money,
obviously, and we can maybe even
Are you making money?
make money, yes.
Great news then
that Louise is already making money.
It turns out, though, that she and
others like her are also creating
good news for the rest of us. If you
look at the impact of all of those
people starting their own
businesses, who are aged 55 or over,
that's worth over £7 billion to the
UK economy in any given year. So
that's really good news for our
economic prosperity. It seems that
if you can spot a gap in the market,
have enough focus and get up and go,
then it's never too late to start
your own business, become successful
and you height even help the
Her bulldog looked
Her bulldog looked impressed
Her bulldog looked impressed with
Her bulldog looked impressed with
that designer gear. That's all for
this week's Inside Out. Tonight's
programme is available on the
iPlayer. Head to our website
bbc.co.uk/insideout and click on
London. Thanks very much for
watching. See you again soon.
The week's strongest stories from the BBC's Inside Out teams - with exclusive, striking and human reports from across England. How to get and stay out of debt. Why is council tax debt rising at an alarming rate? And the baby boomers starting inventive new businesses to fund their retirements.