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Matter of life and debt
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Produced by Dr John Preston, National Stewardship and Resources Officer, in association with the Communications Office and Mission and Public Affairs |
The credit crunch is the biggest news story at the present time - often the main item in television and newspapers reports.
Defined by the Concise Oxford English Dictionary (OED) as "a severe shortage of money or credit", the credit crunch has had a huge impact on households (see below for details of how to get help).
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WHAT NEWSPAPERS SAY ABOUT THE CREDIT CRUNCH 'Job losses could reach 600,000 during 2009, in what the Chartered Institute of Personnel and Development (CIPD) has predicted could be the worst year for jobs in two decades.' 'Woolworths' last 200 UK stores have closed their doors for good, leaving more than 27,000 people unemployed.' 'Google has announced that it is eliminating 100 jobs, the first permanent cuts in its history, as the technology sector braces itself for widespread cuts.' |
Not as easy to borrow money The number of opportunities to borrow money has decreased (the Bank of England says that mortgage lending is down 70 per cent in a year) leading to various negative knock-on effects on the economy. Some people who are used to rolling debts (re-mortgaging on to a new fixed rate, or getting a new zero per cent credit card) are no longer able to do so, and are more than likely paying more than they planned for their credit. This reinforces the message that borrowing to pay bills - or using a credit card to obtain a higher level of consumer spending - is not a long-term solution, as it leads to long-term debt with no plan in place, or guaranteed higher future income, to pay it off.
Finding credit is not the only problem facing families as many households face debt problems due to the rising cost of living. The term ‘fuel poverty’ has been used much in the media, defined, by the Government, as when a household spends 10 per cent or more of its income on heating bills, and has less to spend on other essentials. |
Help from Church for those on edge of debt
It is estimated that as many as seven million people in the UK are at risk of getting into problem debt because of the state of the economy - due to redundancy for example - and many of them won’t realise how serious, and stressful, the situation can become if it isn’t kept under control.
To help households work out whether they are likely to join the debit spiral, a useful guide is available online.
Common sense advice
For those feeling anxious about the amount of debt they are in, common sense advice and helpful Bible quotations are included in the section Are you struggling with debt? along with useful resources - such as an easy-to-use interactive spreadsheet for planning a household budget.
Realising that money problems are a source of stress, specially written prayers are available online, composed by our National Worship Development Officer.
Debt ministry
Churches interested in developing debt ministry at their church should visit How your church can help people in debt, containing instruction on how to teach on debt issues as well as a Powerpoint presentation of our common sense advice, and links to organisations that help to set up local debt advice centres.
Speaking into the credit crunch
To look at how the Church of England is speaking into issues surrounding the credit crunch and increasing household debt - in the House of Lords and other public arenas - go to the section The Church of England on debt containing contributions from, amongst others, the Archbishop of Canterbury, Dr Rowan Williams.
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