Episode 31 Inside Out

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

all-time high.

I don't know how that

happened.

The baby boomers funding

their retirement in surprising new

ways.

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

the economy.

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

the.

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?

I must

spend. I need a drink.

I haven't got

enough money to save.

I'm catching

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.

Our aim

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.

Out of

the £501 coins we are given out

family people decided to save?

148

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

commitment.

Morning.

Since Money

Works opened two years ago, they've

seen over 3,500 Newham residents use

the service.

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

happens?

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.

It's

just ridiculous, all that money.

Michael was given practical advice

alongside a loan to pay off his

debts. We...

We offered him alone

and he was £1213 better off.

Michael

is now debt free.

It worked

wonderfully.

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.

It

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.

Hello, please

may I... I am a bank manager. I look

after everyone's money and make sure

that nothing goes wrong with it.

I

am the assistant bank manager. I

have two supervise all the cashier

's and make sure no one is

misbehaving.

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.

Children can

earn by doing well in spelling and

times tables, working in the bank

and for special achievements.

Can I

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

get.

Children often save for over a

year before they buy anything. They

say over year I will get extra

money.

It is clear to these children

that saving big rewards.

Is that that teddy? Lovely, shall we

buy it?

Yeah.

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

him Tom.

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

tax default.

I lose sleep I am

anxious, I have a lot of anxiety.

Some people have actually committed

suicide.

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.

My court

case. Contact us now to avoid

further action and costs.

In the

past two years, court action for

council tax debt has risen 40%. Use

of bailiffs is also up.

Notice of

removal action, that means we're

coming to get you.

That's your copy

there. We've not received any

payments whatsoever.

I'm struggling

at the same time. I just want to

feed my child. I just want to eat.

I

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.

Westminster

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.

Whoever you're

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.

I'm

asking a simple question.

Single,

unemployed mum Michelle is watching

her £86 council tax debt spiral.

It

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?

It's the

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.

One

exceptional week, Franklin earned

£170 on his zero-hour contract job.

So the council computer cancelled

his Council Tax Benefit.

They sent

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

are knocking.

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.

The

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.

Mike

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 Council

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

collection.

We don't add any

interest or charges...

Like TV money

advisors, they set up a payment

plan.

We would never look to pursue

any bailiffs...

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

win-win.

Are you worried some people

might go out and buy a telly rather

than pay the council tax if you're

ethical?

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.

Now ethical

debt collection in Hammersmith is

about to show whether or not the

bailiffs' knock might, like the

climate change, become part of debt

collecting history.

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

ventures.

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

me.

I'm 61 now. You're getting older

and you're getting less employable.

I would like to work for quite a few

more years.

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

and bees

# I need money... Down on Canvey

Island, Linda is running a small

business making designer wear for

dogs.

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

lined...

Oh, my goodness. It's so

snug.

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

this.

# 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

the country.

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.

I've been

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.

Louise

noticed things changing and worried

that she could become surplus to

requirement.

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

internet.

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

sell on.

Are you making money?

We do

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

economy.

Her

economy.

Her bulldog

economy.

Her bulldog looked

economy.

Her bulldog looked impressed

economy.

Her bulldog looked impressed with

economy.

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.