0:00:04 > 0:00:06Hello, I'm Sean Fletcher.
0:00:06 > 0:00:11You're watching Inside Out.
0:00:11 > 0:00:14Here's what's coming up on tonight's programme: As we count the cost
0:00:14 > 0:00:17of our Christmas spending binges, we find out how to get out
0:00:17 > 0:00:18and stay out of debt.
0:00:18 > 0:00:20Now is the time to actually cut up that credit card.
0:00:20 > 0:00:22Fantastic.
0:00:22 > 0:00:25Don't sit on it, get help, there is no debt we have yet seen
0:00:25 > 0:00:28that can't be sorted and get you to freedom.
0:00:28 > 0:00:31Sending in the bailiffs.
0:00:31 > 0:00:33Why council tax debt is at an all-time high.
0:00:33 > 0:00:39It escalated to £608.75 from £86.75.
0:00:39 > 0:00:42I don't know how that happened.
0:00:42 > 0:00:44And the baby boomers funding their retirement
0:00:44 > 0:00:48in surprising new ways.
0:00:48 > 0:00:52If you've spotted a gap in the market, have enough
0:00:52 > 0:00:55focus and get up and go, then it's never too late
0:00:55 > 0:00:58to start your own business, become successful and you might even
0:00:58 > 0:01:01help the economy.
0:01:07 > 0:01:12Christmas shopping sprees will have spent many of us into the red.
0:01:12 > 0:01:15Here in the UK it's reckoned more than 8 million of us are struggling
0:01:15 > 0:01:22to cope with the money we owe.
0:01:22 > 0:01:25How do we free ourselves from the debt spiral and get savvier
0:01:25 > 0:01:28about the money we spend and save?
0:01:28 > 0:01:29We sent finance expert Jasmine Birtles to find out how
0:01:29 > 0:01:32to get back into the black.
0:01:33 > 0:01:36I'm in Birmingham today with £500, to see if people
0:01:36 > 0:01:41are spenders or savers.
0:01:41 > 0:01:44So, if I was to give you a pound, would you like to
0:01:44 > 0:01:45spend it or save it?
0:01:45 > 0:01:47I'm a spender.
0:01:47 > 0:01:50I'll spend it, I'm thirsty, so I need a drink.
0:01:50 > 0:01:54Clever boy!
0:01:54 > 0:01:56I will spend it.
0:01:56 > 0:01:57I've not got enough money to save.
0:01:57 > 0:01:59While the team continue with our experiment,
0:01:59 > 0:02:02I'm catching up with debt charity community money advice.
0:02:02 > 0:02:04They are hosting a road show here in one of Birmingham's
0:02:04 > 0:02:07largest shopping centres.
0:02:07 > 0:02:08Hi, Julian.
0:02:08 > 0:02:12Good to see you.
0:02:12 > 0:02:16January is when we get a lot of calls across the whole network.
0:02:16 > 0:02:21People have spent Christmas and enjoy themselves,
0:02:21 > 0:02:23and really not connected that with the consequences
0:02:23 > 0:02:26of what happens in the weeks after when all those bills
0:02:26 > 0:02:27start coming in.
0:02:27 > 0:02:30Just asked for some advice, because Christmas has been a bit
0:02:30 > 0:02:33difficult because I have got myself into a bit of debt.
0:02:33 > 0:02:36Our aim today is to try and break the taboo that people have
0:02:36 > 0:02:37about spending money.
0:02:37 > 0:02:40In all the advice we give, face-to-face with people,
0:02:40 > 0:02:43once you get it out in the open and you start opening the post,
0:02:43 > 0:02:51that wall just evaporates.
0:02:56 > 0:02:59Out of the 500 £1 coins we've been giving out,
0:02:59 > 0:03:02just how many people decided to save and how many chose to spend?
0:03:02 > 0:03:03148 would save them.
0:03:03 > 0:03:08But 352 would spend them.
0:03:08 > 0:03:10So it looks like Birmingham people like to spend.
0:03:10 > 0:03:13Our experiment today was just a bit of fun, but statistics show
0:03:13 > 0:03:16we are a nation of spenders.
0:03:16 > 0:03:20The average household has £14,000 worth of non-mortgage debt.
0:03:20 > 0:03:25One in three households in the UK has no savings whatsoever.
0:03:25 > 0:03:26Getting out of debt isn't easy.
0:03:26 > 0:03:29I should know, I've been there.
0:03:29 > 0:03:33But a unique project in London could have a solution.
0:03:33 > 0:03:36I'm in the London Borough of Newham which has the highest level
0:03:36 > 0:03:39of problem debt in the country.
0:03:39 > 0:03:47One in four people here is behind on a bill or a credit commitment.
0:03:48 > 0:03:49Morning.
0:03:49 > 0:03:53Welcome to Money Works.
0:03:53 > 0:03:56Since Money Works opened two years ago, they have seen over 3500 Newham
0:03:56 > 0:03:59residents use the service.
0:03:59 > 0:04:06Money Works was set up by the Mayor of Newham.
0:04:06 > 0:04:08Clients had gone to a surgery, and had a financial crisis
0:04:08 > 0:04:10and turned to loan sharks.
0:04:10 > 0:04:13It was then that he thought, what can I do for the residents
0:04:13 > 0:04:18of Newham to offer more affordable credit?
0:04:18 > 0:04:25Just put in for an £800 loan, let's see what happens.
0:04:27 > 0:04:30What's special about money works is that it offers loans
0:04:30 > 0:04:33in partnership with a credit union alongside debt advice.
0:04:33 > 0:04:36It's not about just giving a loan and forgetting about it,
0:04:36 > 0:04:39it's about working with the customer and looking at where they are
0:04:39 > 0:04:47and how they can move forward.
0:04:47 > 0:04:50Michael first came to Money Works 18 months ago, desperately struggling
0:04:50 > 0:04:51with £5,000 worth of debt.
0:04:51 > 0:04:52I got very depressed.
0:04:52 > 0:04:55I tried to take my own life.
0:04:55 > 0:04:58Because of the pressure of debt.
0:04:58 > 0:05:01Ill-health forced Michael to retire.
0:05:01 > 0:05:04This, together with the drop in benefits, meant he was struggling
0:05:04 > 0:05:07to afford basic living costs.
0:05:07 > 0:05:09The washing machine broke.
0:05:09 > 0:05:13All these things happen around Christmas time, I don't know why.
0:05:13 > 0:05:17Michael could not afford to buy it washing machine out right,
0:05:17 > 0:05:25so he got one from rent to own company Brighthouse.
0:05:25 > 0:05:28At £9.50 a week, it seemed like a good deal, but the total cost
0:05:28 > 0:05:30amounted to over £1600.
0:05:30 > 0:05:38You end up paying astronomical amounts for small items.
0:05:38 > 0:05:42Bright House told us they give people on low
0:05:42 > 0:05:43incomes an affordable way
0:05:43 > 0:05:45to get everyday goods.
0:05:45 > 0:05:48A lot of customers come to us not even aware of some
0:05:48 > 0:05:49of the interest rates are paying.
0:05:49 > 0:05:51It's an eye-opener to them.
0:05:51 > 0:05:57All that money, it's just ridiculous.
0:05:57 > 0:06:00Michael was given practical advice, alongside a loan
0:06:00 > 0:06:03to pay off his debt.
0:06:03 > 0:06:08We decided to offer him a money works loan to pay off
0:06:08 > 0:06:12house loan and Michael was £1213 better off.
0:06:12 > 0:06:18Michael is now debt free.
0:06:18 > 0:06:19Go to somebody like Money Works.
0:06:19 > 0:06:23They work wonders.
0:06:23 > 0:06:25Money Works is proving so successful, other councils
0:06:25 > 0:06:28are now looking at doing the same.
0:06:28 > 0:06:30Half of those seeking debt help nationally have
0:06:30 > 0:06:32mental health problems.
0:06:32 > 0:06:35Wayne suffers from bipolar disorder.
0:06:35 > 0:06:41This time last year he was in serious debt.
0:06:41 > 0:06:44My wife and myself were experiencing problems with our rent so we got
0:06:44 > 0:06:47a credit card to help us.
0:06:47 > 0:06:51Unfortunately, it spiralled out of control.
0:06:51 > 0:06:55Wayne's credit card had an interest rate of 40%.
0:06:55 > 0:06:59He was unable to meet the monthly payments.
0:06:59 > 0:07:03Did you look at the interest rate or was it just a question of,
0:07:03 > 0:07:04who would give you the money?
0:07:04 > 0:07:07Who would give it to us.
0:07:07 > 0:07:12A loan with us would be better than paying the high interest that
0:07:12 > 0:07:20you pay on that card.
0:07:20 > 0:07:23Back in Birmingham, the road show is in full swing.
0:07:23 > 0:07:25For people with credit cards and debts building up,
0:07:25 > 0:07:27the answer to solving the runaway credit is not more credit.
0:07:27 > 0:07:30Now is the time to cut up that credit card.
0:07:30 > 0:07:31Fantastic.
0:07:31 > 0:07:33We have had people burst into tears.
0:07:33 > 0:07:35At the moment the scissors cut through, because of the emotional
0:07:35 > 0:07:41tag and hold that the idea of credit has got with someone.
0:07:41 > 0:07:45It might come as a shock to most of us, but by seven years old,
0:07:45 > 0:07:51children have already formed their financial habits.
0:07:51 > 0:07:55I've come to this school in Boston in Lincolnshire to meet an expert
0:07:55 > 0:07:56team of super savers.
0:07:56 > 0:08:04Hello.
0:08:06 > 0:08:07I'm Lilian, the bank manager.
0:08:07 > 0:08:09I need to look after everyone's money and make
0:08:09 > 0:08:10sure nothing goes wrong.
0:08:10 > 0:08:16My name is Taylor and I am the assistant bank manager.
0:08:16 > 0:08:20I have to supervise all the cashiers and make sure no one is misbehaving.
0:08:20 > 0:08:22When we first started the project we were asking children
0:08:22 > 0:08:25where they think money comes from and they think it
0:08:25 > 0:08:29comes from a cashpoint.
0:08:29 > 0:08:30Or it comes out of the till.
0:08:30 > 0:08:33They didn't really understand, which is why we introduced the idea
0:08:33 > 0:08:41of working for your money and then being rewarded.
0:08:41 > 0:08:44Children can earn their "Kirts" by doing well in spelling and times
0:08:44 > 0:08:47tables, working in the bank or shop and for special achievements.
0:08:47 > 0:08:54Can I deposit them please?
0:08:54 > 0:08:56So this is an actual Kirt, there is the back of it.
0:08:56 > 0:08:59It is worth about 3p, but for these children
0:08:59 > 0:09:02it is worth a lot more.
0:09:02 > 0:09:05They can either deposit it in the bank or once they've earned
0:09:05 > 0:09:08enough they can take some out and spend it in the cut
0:09:08 > 0:09:13in store next door.
0:09:13 > 0:09:14I'm going to go and have a look.
0:09:14 > 0:09:16Children are often saving for over a year before
0:09:16 > 0:09:18they buy anything at all.
0:09:18 > 0:09:22The interest has made a difference as well, they see it as,
0:09:22 > 0:09:27if I keep my 50 Kirts in the bank, over a year I am going
0:09:27 > 0:09:29to get an extra 30 Kirts.
0:09:29 > 0:09:31It's clear to these children that saving reaps rewards.
0:09:31 > 0:09:32What are you going to buy?
0:09:32 > 0:09:35A teddy.
0:09:35 > 0:09:36That one?
0:09:36 > 0:09:43Lovely.
0:09:43 > 0:09:45We are hoping children are actually understanding and experiencing
0:09:45 > 0:09:50the process of saving and learning to wait for things.
0:09:50 > 0:09:54Back at the road show, the day is coming to a close.
0:09:54 > 0:09:56How has it been today?
0:09:56 > 0:09:59We are seeing lots of debts but the most important messages,
0:09:59 > 0:10:05don't sit on it, get help, there is no debt we have yet
0:10:05 > 0:10:08that can't be sorted and get you to freedom.
0:10:10 > 0:10:13Jasmine Birtles reporting there.
0:10:13 > 0:10:16Jasmine will be live on the BBC Facebook page straight
0:10:16 > 0:10:17after the programme tonight to answer any questions
0:10:17 > 0:10:20you might have about debt.
0:10:20 > 0:10:22That's the BBC Money page on Facebook, live
0:10:22 > 0:10:23from eight o'clock tonight.
0:10:23 > 0:10:26I will have those details again at the end of the programme.
0:10:26 > 0:10:28Still to come on the show...
0:10:28 > 0:10:31If you look at the impact on all of those people,
0:10:31 > 0:10:34starting their own businesses, aged 55 or over, that's worth over
0:10:34 > 0:10:38£7 billion to the UK economy in any given year.
0:10:38 > 0:10:44That's really good news for our economic prosperity.
0:10:45 > 0:10:48Overspending on credit cards can be a huge problem for people
0:10:48 > 0:10:52but an even bigger problem nowadays as council tax debt.
0:10:52 > 0:10:54Local authorities often resort to bailiffs to recover
0:10:54 > 0:10:58what they are owed.
0:10:58 > 0:11:00But is this approach too heavy-handed, especially when some
0:11:00 > 0:11:02people simply find themselves unable to pay?
0:11:02 > 0:11:09We sent Mark Jordan to investigate.
0:11:09 > 0:11:13The Clink Prison Museum.
0:11:13 > 0:11:17For centuries, its bars held traitors, thieves and debtors.
0:11:17 > 0:11:21The traitors were executed.
0:11:21 > 0:11:23But for debtors, the only way they would ever walk free
0:11:23 > 0:11:28was to pay up in full.
0:11:28 > 0:11:32But how to do that behind bars with mounting weekly jail charges?
0:11:32 > 0:11:38The "rat man", unable to pay, ate rats until he died.
0:11:38 > 0:11:41This is a grim place, so why is it that a leading London
0:11:41 > 0:11:43barrister thinks many councils are using similar tactics to bring
0:11:43 > 0:11:49in their council tax debt?
0:11:49 > 0:11:51Council tax is Britain's biggest personal debt
0:11:51 > 0:11:56problem, and it is growing.
0:11:56 > 0:12:03Some local authorities are going down the road of bankruptcy,
0:12:03 > 0:12:05making people insolvent, which hugely multiplies their debt.
0:12:05 > 0:12:07With the consequence that they lose their homes, their businesses,
0:12:07 > 0:12:09it is utterly devastating.
0:12:09 > 0:12:11It's probably in some ways actually worse now
0:12:11 > 0:12:17than being jailed for council tax.
0:12:17 > 0:12:22To be honest, I'm losing sleep, I'm anxious, I have a lot of anxiety.
0:12:22 > 0:12:28The worst cases I have been involved with end in suicide.
0:12:28 > 0:12:31Four years ago, Peter Williams brought trains to a halt
0:12:31 > 0:12:35after killing himself on the railway.
0:12:35 > 0:12:38His home had been taken away for failing to pay £1350
0:12:38 > 0:12:43over council tax debt.
0:12:43 > 0:12:46The problem was Peter was mentally ill, nobody realised this
0:12:46 > 0:12:49at the time and as a result he was literally hounded to death
0:12:49 > 0:12:54over what was a relatively small amount of money.
0:12:54 > 0:12:59Which was inflated to over £70,000 by the time of his death.
0:12:59 > 0:13:02It was all costs, he had paid his council tax debt,
0:13:02 > 0:13:05this was all costs.
0:13:05 > 0:13:07I am seeing this kind of stress repeated every week now
0:13:07 > 0:13:09around England and Wales.
0:13:09 > 0:13:12My court case...
0:13:12 > 0:13:15Contact us now to avoid further action and costs.
0:13:15 > 0:13:18In the past two years, court action for council
0:13:18 > 0:13:20tax debt has risen 40%.
0:13:20 > 0:13:26Use of bailiffs is also up.
0:13:26 > 0:13:29Notice of removal action, that means we are coming to get you.
0:13:29 > 0:13:32That's your copy there.
0:13:32 > 0:13:35We have not received any payments whatsoever.
0:13:35 > 0:13:38I am struggling, at the same time, I just want to feed my child,
0:13:38 > 0:13:40I want to eat, that's all.
0:13:40 > 0:13:42I require payment today.
0:13:42 > 0:13:45You have got just over £1000 to pay.
0:13:45 > 0:13:48What are you offering now?
0:13:48 > 0:13:5297% of us pay our council tax bill, but debt campaigners claim over
0:13:52 > 0:14:00200,000 bailiff visits were made in London to those who don't.
0:14:02 > 0:14:04The figures show, if you look at boroughs across London
0:14:04 > 0:14:07and England and Wales that there is very different
0:14:07 > 0:14:08practice in different
0:14:08 > 0:14:09boroughs, it's a postcode lottery.
0:14:09 > 0:14:17Westminster Council send bailiffs out over 18,000
0:14:18 > 0:14:19times, while Havering was a tenth of that.
0:14:19 > 0:14:22In less than a decade, government grants to councils have
0:14:22 > 0:14:23been cut by a third.
0:14:23 > 0:14:25Whoever you are looking for, it's not me...
0:14:25 > 0:14:27Westminster and several other councils declined to be interviewed,
0:14:27 > 0:14:29but all insist they avoid targeting the vulnerable.
0:14:29 > 0:14:35Only using bailiffs when sustainable repayment plans have failed.
0:14:35 > 0:14:37But single unemployed mum Michelle is watching her £86
0:14:37 > 0:14:43council tax debt spiral.
0:14:43 > 0:14:47It escalated to £608, 75p from £86.75.
0:14:47 > 0:14:53I don't know how that happened.
0:14:53 > 0:14:55It's bad enough that you have to pay that debt,
0:14:55 > 0:14:57then they'd chuck that on.
0:14:57 > 0:14:59I'm thinking, if I can't pay that, how am I supposed
0:14:59 > 0:15:00to pay that on top?
0:15:00 > 0:15:02What is it you want from me?
0:15:02 > 0:15:05It's the councils who decide if Dave the Bailiff comes knocking.
0:15:05 > 0:15:08Is there any difference in the way you work between "can't
0:15:08 > 0:15:11pay" or "won't pay?"
0:15:11 > 0:15:15No, it's not my business.
0:15:15 > 0:15:17The system does not distinguish at all now
0:15:17 > 0:15:23between the can't pay and won't pay.
0:15:23 > 0:15:25Council tax has become a kind of Frankenstein's monster,
0:15:25 > 0:15:30for all intents and purposes, the local authority has now taken
0:15:30 > 0:15:33over in terms of council tax by its computers.
0:15:33 > 0:15:36It is the computer which cultivates your bill and is in charge
0:15:36 > 0:15:44of every step of the way.
0:15:44 > 0:15:46It's almost like the Terminator films in that respect,
0:15:46 > 0:15:53with enforcement processes which just go on and on.
0:15:53 > 0:15:56One exceptional week, Franklin earnt £170 on his zero-hour contract job.
0:15:56 > 0:15:59So the council computer cancelled his council tax benefit.
0:15:59 > 0:16:01They sent me an assessment saying I earn £170 a week
0:16:01 > 0:16:03so I can afford to pay it.
0:16:03 > 0:16:04I said no, I'm not.
0:16:04 > 0:16:07Some weeks I was earning £20 a week.
0:16:07 > 0:16:09Franklin says he could not afford the full council
0:16:09 > 0:16:10tax now being charged.
0:16:10 > 0:16:13And the bailiffs are knocking.
0:16:13 > 0:16:15I'm trying to better myself, I am diagnosed with heart
0:16:15 > 0:16:17and kidney failure.
0:16:17 > 0:16:19I thought, let me go and get a job.
0:16:19 > 0:16:27And try to better myself.
0:16:27 > 0:16:30This is the obstacle, why people don't want to work,
0:16:30 > 0:16:32because of the hassle, not because they are lazy,
0:16:32 > 0:16:35it's because of the hassle they get from the government.
0:16:35 > 0:16:37The letterbox's jammed up.
0:16:37 > 0:16:39In some cases, where it's impossible to get the money back,
0:16:39 > 0:16:41then there's nothing else we can do.
0:16:41 > 0:16:43Are you finding that more and more?
0:16:43 > 0:16:45Yes, yes.
0:16:45 > 0:16:49People do not have the means to pay.
0:16:49 > 0:16:50Mike Thomson was a book-seller until a devastating illness meant
0:16:50 > 0:16:54he could barely work.
0:16:54 > 0:16:57His council tax debt would take his home and lead to recovery costs,
0:16:57 > 0:17:0330 times the original arrears of £2900.
0:17:03 > 0:17:05The Council forced sale of the house, I got just over £6,000
0:17:05 > 0:17:12as my share of the proceeds.
0:17:12 > 0:17:15The other £85, £86,000 was swallowed up in the debt itself
0:17:15 > 0:17:19plus all the costs that accumulated along the way.
0:17:19 > 0:17:27Now Mike lives in sheltered social housing, and guess who is paying?
0:17:27 > 0:17:29Now the government foots full housing benefit for me
0:17:29 > 0:17:32which is currently about eight and a half thousand a year.
0:17:32 > 0:17:34The lawyers who do this business for local authorities prosper
0:17:34 > 0:17:36mightily, but the local authorities themselves, actually in the great
0:17:36 > 0:17:42scheme of things, lose out big time.
0:17:42 > 0:17:44At Hammersmith and Fulham Council, they have begun to wonder
0:17:44 > 0:17:48if bankrupting, seizure of homes and use of bailiffs is working.
0:17:48 > 0:17:51They claim bailiffs only recover 30% of council tax debt and are getting
0:17:51 > 0:17:56rid of them from April.
0:17:56 > 0:17:59If a family is trying to keep the bailiffs away and prioritises
0:17:59 > 0:18:02the bill for council tax, they then might miss their rental
0:18:02 > 0:18:04payment and then you are left with a homeless family,
0:18:04 > 0:18:06being traumatised, but then presenting the public sector a huge
0:18:06 > 0:18:09bill in terms of rehousing and all the other impacts
0:18:09 > 0:18:16homelessness can have.
0:18:16 > 0:18:18First Credit are in charge of Hammersmith's ethical
0:18:18 > 0:18:19new debt collection.
0:18:19 > 0:18:24We don't add any interest or charges...
0:18:24 > 0:18:30They set up a payment plan.
0:18:30 > 0:18:33I'm hoping for Hammersmith, they will end up with the same
0:18:33 > 0:18:35amount of money collected or more, which they can give
0:18:35 > 0:18:39back to the residents.
0:18:39 > 0:18:41I'm already seeing on cases they have given up on,
0:18:41 > 0:18:44I am already connecting money on the cases they have given up on,
0:18:44 > 0:18:47so I know that will give them more money back for the residents
0:18:47 > 0:18:48which is a win-win.
0:18:48 > 0:18:52Are you worried some people might go out and buy a telly rather than pay
0:18:52 > 0:18:53the council tax if you are ethical?
0:18:53 > 0:18:55I'm very optimistic this will work.
0:18:55 > 0:18:57We are not stopping debt collection, we are just doing
0:18:57 > 0:18:59it in an ethical way.
0:18:59 > 0:19:00But the Bailiff industry warn Hammersmith's
0:19:00 > 0:19:03experiment will backfire.
0:19:03 > 0:19:06The enforcement industry has collected a roundabout £650 million
0:19:06 > 0:19:11worth of local authority debt.
0:19:11 > 0:19:15To dispense with the enforcement service will come at a price.
0:19:15 > 0:19:19I think that in two or three years' time, the coffers will be looked
0:19:19 > 0:19:22at and the question will be asked, where is the money?
0:19:22 > 0:19:26They come up with all sorts of excuses but you can normally tell
0:19:26 > 0:19:28whether they are lying.
0:19:28 > 0:19:30Or, I can, anyway.
0:19:30 > 0:19:33Now ethical debt collection in Hammersmith is about to show
0:19:33 > 0:19:36whether or not the Bailiff's knock, like the clink, might become part
0:19:36 > 0:19:43of debt collecting history.
0:19:43 > 0:19:47We hear a lot about baby boomers and how lucky they are compared
0:19:47 > 0:19:50to less well off generations, but not all boomers are secure
0:19:50 > 0:19:53enough to put their feet up and let their pensions take
0:19:53 > 0:19:58care of everything.
0:19:58 > 0:20:00In fact a record are funding their retirements by setting up
0:20:00 > 0:20:04first-time business ventures.
0:20:04 > 0:20:07We sent our very own resident boomer Jo Good to meet some of them.
0:20:11 > 0:20:14I'm 62 and I'm still working, whether it is hosting my daily show
0:20:14 > 0:20:19here at BBC Radio London or presenting films like this one.
0:20:19 > 0:20:23I started work at 16, and I'm freelance so I don't have a pension.
0:20:23 > 0:20:27But I often wake up at night with the fear of what will happen
0:20:27 > 0:20:31when I'm no longer flavour of the month.
0:20:31 > 0:20:34Living off a state pension hardly fills me with glee,
0:20:34 > 0:20:38and I realise that some point I'm going to have to change my life.
0:20:38 > 0:20:41But I'm not the only one, there are lots more like me.
0:20:41 > 0:20:42I'm 61 now.
0:20:42 > 0:20:44You are getting older and less employable.
0:20:44 > 0:20:48I would like to work for quite a few more years.
0:20:48 > 0:20:50I was unemployable because of my age, every job I went
0:20:50 > 0:20:54for I was turned down flat.
0:20:54 > 0:20:58Like many others in our age group, Lynda Lee and Louise Chung need
0:20:58 > 0:20:59to keep the money coming in.
0:20:59 > 0:21:01They know they still have loads to offer.
0:21:01 > 0:21:04So they decided to take matters into their own hands and started
0:21:04 > 0:21:05up their own small businesses.
0:21:05 > 0:21:10For the first time in their lives.
0:21:10 > 0:21:14# The best things in life are free, but you can give them
0:21:14 > 0:21:15to the birds and bees.
0:21:15 > 0:21:20# I need money.
0:21:20 > 0:21:22Down on Canvey Island, Lynda is running a small business
0:21:22 > 0:21:29making designer wear for dogs.
0:21:29 > 0:21:31I do collars, leads, coats, harnesses, carry bags.
0:21:31 > 0:21:33Car seats.
0:21:33 > 0:21:38Sometimes I get up at maybe four, 5am and I start cutting patterns.
0:21:38 > 0:21:38Four or five in the morning?
0:21:38 > 0:21:41Yeah, crazy.
0:21:41 > 0:21:44Because there's an awful lot to do for one person.
0:21:44 > 0:21:47But it's not financially secure at the moment to employ people
0:21:47 > 0:21:51or to go the next step.
0:21:51 > 0:21:53It will be.
0:21:53 > 0:21:57Basically, if I've got work to do, I have got to get up and do it.
0:21:57 > 0:22:00Most of it is online selling, which to a dinosaur like me,
0:22:00 > 0:22:02I've had to learn a lot.
0:22:02 > 0:22:05Oh, my goodness.
0:22:05 > 0:22:07So snug!
0:22:07 > 0:22:10Now I'm shipping them out everywhere, I have sent
0:22:10 > 0:22:14them off to Las Vegas, Valencia in Spain, so I was not
0:22:14 > 0:22:19only going to England, Scotland Ireland and Wales.
0:22:19 > 0:22:21It is going.
0:22:21 > 0:22:23When I started this business, it was with 79p
0:22:23 > 0:22:24and a sewing machine.
0:22:24 > 0:22:25That was it.
0:22:25 > 0:22:28And I'm thinking, there's no food on the table, yes,
0:22:28 > 0:22:34I can go to family and friends, it wasn't in my nature.
0:22:34 > 0:22:37They will say, what are you eating tonight?
0:22:37 > 0:22:38Having this, having that.
0:22:38 > 0:22:45Literally just toast.
0:22:45 > 0:22:48Getting up the next day and making something to sell,
0:22:48 > 0:22:52because at the end of the day, you have to rely on yourself.
0:22:52 > 0:22:55That's the way I am, and I'm very proud,
0:22:55 > 0:22:57and I was like, I can do this.
0:22:57 > 0:23:00# My rent is due, kids all need brand-new shoes.
0:23:00 > 0:23:08# So I went to the bank to see what they could do...
0:23:13 > 0:23:16There are many like Linda, starting at small businesses later
0:23:16 > 0:23:19in life than would be expected.
0:23:19 > 0:23:22Barclays Bank have done a lot of research into this growing trend
0:23:22 > 0:23:24over the last ten years.
0:23:24 > 0:23:26It's really surprising what we've found.
0:23:26 > 0:23:28There's been a huge growth in the number of people
0:23:28 > 0:23:33in their late 50s, even late 60s who are starting their own business.
0:23:33 > 0:23:35If you think of people in their mid-20s and early 30s,
0:23:35 > 0:23:37we have seen about 20%.
0:23:37 > 0:23:40For older people in the late 50s and 60s, its much
0:23:40 > 0:23:45higher, 63% growth.
0:23:45 > 0:23:47We've seen this new trend most prevalent in London
0:23:47 > 0:23:55and the south-east comparative rest of the country.
0:23:57 > 0:24:00In London, it is up 89% higher than anywhere else in the country.
0:24:00 > 0:24:02One of the reasons many of these new entrepreneurs are willing
0:24:02 > 0:24:06to give it a go so late in life is that people of our age
0:24:06 > 0:24:10have a whole wealth of life experiences to draw upon.
0:24:13 > 0:24:17Starting a small business often involves getting a bank loan,
0:24:17 > 0:24:21and these new entrepreneurs need a watertight business plan.
0:24:21 > 0:24:24This group in Whitechapel advise them and point out
0:24:24 > 0:24:28the possible pitfalls.
0:24:28 > 0:24:31The reality is, you need to have one-to-one support.
0:24:31 > 0:24:34You need that mental, shoulder to cry on, someone
0:24:34 > 0:24:38who will give you true advice, not just going to speak to someone
0:24:38 > 0:24:41in the pub or your relatives who will often tell you the things
0:24:41 > 0:24:43they think you want to hear.
0:24:43 > 0:24:46What we can do is be a critical friend, somebody who can point out
0:24:46 > 0:24:54where maybe there are some errors in the business plan,
0:24:55 > 0:24:56And where some extra work is required.
0:24:56 > 0:24:58They have been looking after Indravardhan Patel,
0:24:58 > 0:25:01who could not find work, so tried to get a loan
0:25:01 > 0:25:03to open up a post office.
0:25:03 > 0:25:05Indravardhan needed help in finding his funding requirement
0:25:05 > 0:25:10and putting up a business plan.
0:25:10 > 0:25:13To help him make a credible application for finance.
0:25:13 > 0:25:15We have worked together on his draft, got into a format that
0:25:15 > 0:25:18helped him to make the application, and ultimately we made
0:25:18 > 0:25:21the application and he was successful with his start-up loan.
0:25:21 > 0:25:24After seeing my business plan, he said we need to make some
0:25:24 > 0:25:26changes in this one.
0:25:26 > 0:25:28He helped me out.
0:25:28 > 0:25:31We made a lot of changes, and that made my business
0:25:31 > 0:25:37plan very attractive, he helped me to get a start-up loan.
0:25:37 > 0:25:40Life is better, better than before.
0:25:40 > 0:25:48I was living in hell, months before I started my own business.
0:25:48 > 0:25:54Now I'm really happy.
0:26:01 > 0:26:03Not everyone makes the decision to start afresh because they can't
0:26:03 > 0:26:06get a job - Louise Chung was at the very top
0:26:06 > 0:26:10of a hugely successful career.
0:26:10 > 0:26:17I've been a magazine editor for three decades.
0:26:17 > 0:26:23A journalist and editor, I've been at magazines like Vogue, Good
0:26:23 > 0:26:24Housekeeping, Psychology magazine.
0:26:24 > 0:26:27But Louise noticed things changing and worried that she could become
0:26:27 > 0:26:33surplus to requirement.
0:26:33 > 0:26:35In journalism, it is not entirely but largely
0:26:35 > 0:26:37a career for young people.
0:26:37 > 0:26:39It is going through enormous changes because of the Internet.
0:26:39 > 0:26:41I'm from the old school.
0:26:41 > 0:26:45So five years ago, old school Louise decided to take a giant step and get
0:26:45 > 0:26:48out of the world of magazines, but surprisingly the business
0:26:48 > 0:26:53she started up is based purely on the Internet.
0:26:53 > 0:26:55What I decided to do was start a site that finds
0:26:55 > 0:27:01therapists for people, so it's basically using an algorithm
0:27:01 > 0:27:04to match people looking for therapy with the therapists most
0:27:04 > 0:27:05suited to them.
0:27:05 > 0:27:08Of course, I don't literally know how to do that.
0:27:08 > 0:27:13So you use tech developers in this business, I employ people.
0:27:13 > 0:27:16I'm building a business that I hope will be a major force
0:27:16 > 0:27:21and will make money obviously, and we can maybe even sell on.
0:27:21 > 0:27:24Are you making money?
0:27:24 > 0:27:31We do make money, yes.
0:27:32 > 0:27:36Great news then, that Louise is already making money.
0:27:36 > 0:27:39It turns out that she and others like her are also creating some good
0:27:39 > 0:27:43news for the rest of us.
0:27:43 > 0:27:46If you look at the impact of all those people starting
0:27:46 > 0:27:49their own businesses who are aged 55 or over, that's worth over
0:27:49 > 0:27:53£7 billion to the UK economy in any given year.
0:27:53 > 0:27:57That's really good news for our economic prosperity.
0:27:57 > 0:27:59It seems if you can spot a gap in the market,
0:27:59 > 0:28:04have enough focus and get up and go, then it's never too late
0:28:04 > 0:28:06to start your own business, become successful and you might
0:28:06 > 0:28:09even help the economy.
0:28:12 > 0:28:14Jo Good there, and her bulldog Matilda certainly looked impressed
0:28:14 > 0:28:17with all that designer dog gear!
0:28:17 > 0:28:19That's all for this week's inside out, tonight's programme
0:28:19 > 0:28:21will be available on the iPlayer.
0:28:21 > 0:28:22Head to our website, BBC.co.uk/InsideOut
0:28:22 > 0:28:29and click on London.
0:28:29 > 0:28:32Don't forget you can join Jasmine Birtles live now
0:28:32 > 0:28:35on the BBC Money Facebook page where she will be answering
0:28:35 > 0:28:36all your questions on debt.
0:28:36 > 0:28:39Thanks for watching, see you again soon.