According to researchers, if you are living in poverty then you’re probably paying more than you need to for your services and basic goods than someone who isn’t in poverty will do.
Indeed, the poverty premium has been calculated to be an average of £500 a year.
The news comes after government figures reveal that anyone who manages to get by on 60% or less of the UK’s median income – which is £27,300 – will be classed as being in ‘relative’ poverty.
Unfortunately, around one in five people living in Scotland are considered to be in the bracket of relative poverty.
These means that 20% of Scots are managing to survive on £248 a week if they are a couple without children. If they are single and have no children then they get by on £144 per week.
All the money must be used to pay for rent, food and keeping a home warm as well as buying clothes.
People living in poverty pay a premium
However, previous research from one University and a social policy charity reveals that people living in poverty pay a premium because of their poor financial situation.
A spokesman for the charity says that people living in poverty tend to pay more for credit as well as being on a more expensive fuel tariff.
That’s because many cannot afford to pay bills by direct debit and they will need to pay extra if they want to pay their bills in cash.
Researchers also highlight that for those who fall into poverty, it’s not only hard to get out of the debt trap but they end up paying more for debt as result.
As an example, for those who cannot service their debt, that means they cannot pay their bills on time, end up with a poor credit history which then affects them by being denied better credit terms or having no credit access whatsoever.
Also, while there is a lot of advice to switch energy suppliers, for those who live in poverty it could be a way of reducing the extra costs but not many of them want to switch because they might be afraid of further risk to their financial standing.
Growing numbers of people in work are sliding into poverty
However, researchers also highlight that it’s not just those who get by on benefits and who live below the poverty line since high levels of inflation and stagnant wages means growing numbers of people in work are sliding into poverty as well.
Indeed, the Scottish government has estimated that around two in three Scots who are living in poverty are in a working household.
For anyone who is living in Scotland and wanting to get out of debt, there are routes to a better financial situation.
To help you understand and appreciate what these routes are, there’s an experienced team of debt advisers available at Scotland’s Trust Deed to talk about your current financial situation see what the potential solutions might be.
Debt solutions for people living in Scotland, and Scotland’s Trust Deed can help arrange these, include a trust deed, a debt arrangement scheme and also sequestration.
Scotland’s Trust Deed is here to help you
It’s important that anyone who is living in Scotland does not ignore their worsening financial situation and instead looks to improve or deal with their debts and Scotland’s Trust Deed is here to help you achieve just that. Contact us today to find out how.