Hundreds of Plymouth residents fear bankruptcy as inflation soars

0

Citizens Advice Plymouth is inundated with calls for help with many seeking insolvency advice and fears the situation will get worse as inflation hits a 40-year high of 9.1%

Hundreds of Plymouthians are seeking advice on debt and whether they could go bankrupt as inflation soars and they find it increasingly difficult to make ends meet. Citizens Advice Plymouth has been inundated with thousands of requests for help, including nearly 1,000 relating to debt.

With inflation now at a 40-year high of 9.1% and energy set to get even more expensive, there are fears that families will be pushed to the brink of bankruptcy. Since the start of April 2022, 1,134 Plymouth residents have turned to Citizens Advice for help with 5,482 issues.

Citizens Advice said that in the city, 108 people needed help accessing food banks and 195 needed access to grants such as the Household Support Fund. This represents an increase of almost 240% compared to the same period last year.

READ NEXT: Plymouth firm praised for giving staff four-day week and pay rise

In addition, 239 people sought debt advice, more than a fifth of all people seeking help. These people raised 985 debt-related issues. Five needed help accessing Individual Voluntary Arrangements (IVAs), 19 with Debt Relief Orders (DROs) and five with bankruptcies. Meanwhile, a search of the Gazette’s public record revealed that at least 10 bankruptcy orders had been issued to people in Plymouth since the start of April 2022.

A spokesperson for Citizens Advice Plymouth said: ‘Every day we have clients at the point of crisis. Many view insolvency as a last resort. A few years ago that would have been a drastic solution, but now they see it as the only way to get rid of their debts. Now that things are tighter, people are unable to meet their financial commitments. »

Citizens Advice Councilors in Plymouth are now expecting a significant increase in the number of customers when the temperature drops this autumn and many will have to turn on the heating in their homes. The spokesperson said: ‘They also found that most people struggling with energy bills use prepayment meters. This is because they don’t have fixed rates.

“However, those who pay energy bills quarterly could see a significant increase in their expenses over the next two months. This means that others will need help paying their energy bills and food expenses.

“There are still many people who have not been affected by the increase in energy prices thanks to fixed tariffs. With high temperatures they don’t need to have the heater on, but winter can be horrible. An upsurge is expected. »

Since the beginning of this exercise, Citizens Advice has helped 10,025 people across the country to solve 66,780 problems. Almost half (47%) of all clients had debt problems and a quarter needed access to food banks and other forms of charitable support.

READ NEXT: Plymouth businesses fight for survival as UK heads into recession

The consumer price index (CPI) inflation rate rose from 9% in April to 9.1% in May. The increase is in line with what analysts had expected and pushes the measure to its highest level since early 1982, according to the Office for National Statistics (OBS).

The change was largely due to rising food prices, which added more than 0.2 percentage point to the inflation figure, the ONS said. Clothing and footwear prices helped contain inflation, while leisure and culture prices also pulled it down.

The news will add to the difficulties faced by many people across the UK. Energy bills rose 54% for the average household in early April and will remain at that level through October.

But forecasts released this week predict that the government’s cap on energy bills could rise again from an already record high of £1,971 to £2,980 in the autumn. The Bank of England has predicted that inflation will climb to over 11% in October after the price cap was changed again.

The price of energy does not only affect household energy bills. Gas, oil and other fossil fuels are needed to make and transport many of the goods that households buy every month. When the price of fuel increases, the price of the final product also increases.

Energy prices have skyrocketed over the past year. For starters, they started to rise when the global economy started to reopen and demand for energy increased after the pandemic.

READ NEXT: CBI chief tells Plymouth businesses UK is hurtling towards recession

Prices then worsened, particularly in Europe, when Russia launched a full-scale invasion of Ukraine in February. Russia is one of the largest energy producers in the world.

A breakdown from the ONS shows the biggest increases in the 12 months to May were in fossil fuel products, including diesel, electricity, petrol and natural gas. These, however, have changed little since April.

Some of the biggest changes from April were in food products. Ukraine is one of the world’s largest grain producers and experts are concerned about the impact the war could have on global prices and availability.

The price of flour and other cereals in the UK had fallen before the start of the war, but has since risen. Between February and April price increases increased from 2.3% to 9.3%. But in May, prices jumped and are now 16.3% higher than a year ago. The rise in olive oil prices also accelerated, from 9.5% in April to 18% in May, the ONS said.

Statisticians said the consumer price index including homeowners’ housing costs (CPIH) rose 7.9% in May from 7.8% in April. The retail price index, which is used to calculate train fares, rose from 11.1% in April to 11.7% in May.

Shadow Chancellor Rachel Reeves said: ‘Today’s rise in inflation is another milestone for people who see wages, growth and living standards continue to fall. Although rapid inflation is pushing family finances to the brink, the spiral of low pay facing many Britons is nothing new. Over the past decade, Conservative mismanagement of our economy has meant that living standards and real wages have not increased.

READ NEXT:

Devonport shipyard workers land 13% pay rise against inflation

Plymouth faces economic crisis as inflation rises and other towns poach workers

Plymouth set for maritime jobs bonanza, says new Tory leader

More than 40 Plymouth businesses at risk of bankruptcy

Employment Minister urges Plymouth businesses to pay bonuses to loyal staff as vacancies soar

Get the stories that matter most to your inbox daily by clicking here

Share.

Comments are closed.