Paul Kaye, CEO of financial services provider Leeds Credit Union, has expressed concern that the announcements made in the Chancellor of the Exchequer’s Spring Statement do not go far enough to help the people of Leeds.
Despite Rishi Sunak’s mini-Budget delivering some positive news, Mr Kaye fears that new measures like the cut in fuel duty are merely short term tinkering and insufficient to offset the impact of sky-rocketing inflation, increases in National Insurance and higher interest rates. As a result, Mr Kaye fears a significant number of people could be forced to turn to high cost short term lenders or loan sharks to make ends meet as their finances continue to be squeezed over the coming months.
Mr Kaye said:
“Financial help from the Government is always welcome and some policies in the Spring Statement certainly offer some short term help, however it’s impossible to believe the new measures alone will alleviate the negative impact that the ever-increasing cost of living is having on ordinary, hard-working families.
“For society’s most financially unstable, there is still the very real possibility that they will be forced to choose between eating or heating which, in 2022, clearly should not be the case. As a credit union, one of our greatest concerns is that those most at risk of falling between the cracks will be tempted to opt for a short-term cash injection to help pay their bills and borrow from high cost lenders or, worse still, loan sharks. Needless to say, this is not a route anyone should go down as it invariably leads to even more financial difficulties further down the line.
“While some of the financial challenges facing the UK are being created by exceptional circumstances across the world, many more are created at home by a lack of financial education in schools that fails to equip people with the skills they need to manage their finances and budget effectively, leading to individuals finding themselves in a spiral of debt.
“Encouraging people to get into work wherever possible has to be a key cornerstone of a successful economy and more creative and simple solutions to make it desirable to do so must be delivered. It is unsustainable for the Government to keep taxing, borrowing and spending, so it needs to focus its attention on helping businesses create more jobs and relieving wage pressures. Failure to do so will result in businesses being forced to cut costs or close in order to survive, both of which will result in yet more unemployment.
“The good news is that there are many credit unions available to help people in need of advice or financial assistance. I would encourage anyone facing financial hardship – regardless of their level of income – to contact their local credit union, who can offer them the affordable loans, access to savings accounts, advice and support they need to make it through this period of economic uncertainty.
“By helping vulnerable households plan their finances and assessing their debts, affordable borrowing can help people make their money go further at a time when prudence has never been more important.”
Leeds Credit Union is a community-focused organisation with 37,000 members and is one of the largest in the UK. A financial cooperative, its purpose is to give members access to affordable loans at a fair rate of interest and competitive savings plans.
This post is based on a press release issued on behalf of Leeds Credit Union