3. Refuse to roll your loan over

Your payday lender might suggest that you ‘roll over’ your loan for another month or so. This is a really bad idea. It means you have to pay even more charges and interest – so you end up owing much more money. What you should do instead is seek debt advice and agree a repayment plan that you can afford with the lender. Before rolling over your loan, the payday lender must refer you to free debt advice. And since July 2014 they cannot roll over your loan more than twice.

4. Get help from a free debt adviser

If you’re struggling with bills or finding it difficult to deal with a payday lender, contact one of these free, confidential debt advice services:

StepChange Debt Charity
National Debtline
Citizens Advice – England and Wales
Citizens Advice – Scotland
Citizens Advice – Northern Ireland
Advice NI

The adviser will be on your side – they’ll help you get your debts under control and can negotiate with the lender on your behalf. Tell your lender as soon as you start working with the debt adviser. Follow up your phone call with a letter – you can use Which’s letter telling a payday lender that you’re working with a debt adviser. Once you’ve done this, your lender must give you a reasonable amount of time to come up with a repayment plan before using debt collectors. If they keep contacting you while you’re working with the debt adviser, send an email asking them to stop.

Your payday lender should not try to put you under undue pressure, including:

• Calling you at work without your permission.
• Discussing your debt with your employer or family members.
• Refusing to deal with the debt advice service acting for you.

For more information watch this information video from citizens advices on knowing your rights surrounding payday loans:

It is true that money makes the world go around and for a lot of us anxiety surrounding money is a normal thing. A lot of us are guilty of living beyond our means some of the time and struggle to keep to our budgets. Although financial uncertainty may seem like a everyday feeling for some, for others it can have devastating effect on an individual’s mental health. Almost half of those who are in debt also have a mental health problem and 87% of people who have a pre-existing mental health condition have found that money worries exacerbate their condition. In 2018/19 The Electrical Industries Charity awarded over £184,000 to those in financial difficulty from debt advice, support and bankruptcy to food and immediate needs to fuel poverty and financial assistance for serious illness. Financial support remains as one of the biggest reasons an industry member contacts the charity and the Electrical Industries Charity understand the impact of financial distress.

Financial distress affects us in lots of different ways. For some of us it may make us feel inferior or even incompetent. You may feel as though you have lost the ability to make decisions as your finances limit what you can do. Disagreements over money can lead to your feeling isolated and withdrawn from your spouse and family. In more extreme cases you may feel as though you have let down your family. It is when these feelings of incompetence creep in that you are at your most vulnerable.

Tom, an electrical business owner, had been mentally stable but found within the last six months he was struggling with his mental health. His business had begun to struggle financially and although Tom knew his business could recover, his marriage was beginning to breakdown and Tom was beginning to despair.

To cope Tom turned to the bottle. He began to drink excessively weekly and even began to black-out from drinking too much. During this stage of his life Tom began to feel increasingly suicidal.

Tom approached the Electrical Industries Charity to ask for help. 1 in 3 of EIC cases focus on mental health and each year the Electrical Industries Charity receive thousands of calls from those who are at crisis point. The charity funded a psychiatric assessment for Tom to determine a formal diagnosis and then Tom was referred for charity sourced and funded therapy. Tom’s Charity case worker helped him work out a household budget plan and gave a supporting ear when he needed it. This was the major turning point for Tom.

Tom developed coping strategies and began to process his thoughts in a different and more healthy way. He was encouraged to engage with his financial problems and most importantly re-connect with his young daughters and family.

A message from Tom “What happened this year came upon me like a wave that left me sinking for a large portion of it, looking back had I not involved myself with the Electrical Industries Charity in years prior I would not have had someone to speak to. The day I spoke with the Electrical Industries Charity I was pulled into the side of the road in tears not knowing where my business and personal life was after losing control of everything. The journey has been long and tough and I still struggle at times but I am coming into December in a very reflective mood, stronger than I have been in years albeit still not 100% there, my business doesn’t drive me to carnage and I have been able to take it under complete control and I have the reality in front of me that I have a Family whom I love very much”

If you or someone you know is struggling with their finances, mental health, addiction or marriage breakdown please contact our free and confidential support team on 0800 652 1618 or email This email address is being protected from spambots. You need JavaScript enabled to view it.

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During the pandemic a lot of us have re-assessed our finances. We may have investigated our direct debits and cancelled an app subscription or two, or maybe we realised how much we were spending on takeaway coffee while commuting in and out of work. For some of us, our financial landscape has completely changed. Those who are furloughed are learning to budget with 80% of their wage while others may have been made redundant. The self-employed have also been hit with the financial ramifications of COVID-19 with financial assistance varying depending on business model and lots of other factors. Since the beginning of the pandemic the Electrical Industries Charity have seen an increase in people coming to the charity for emergency assistance or financial advice. A staggering 22% of the electrical and energy sector lives week-to-week and their already low income may have been affected even more by coronavirus.

The Electrical Industries Charity welfare team have been on hand to answer the helpline calls from the industry offering advice, signposting and assisting with counselling, financial services or CV writing. Although construction sites and many businesses have begun to re-open there is still much uncertainty and the charity welfare team are still on hand to help you through the pandemic.

There are so many ways the Electrical Industries Charity can be of assistance to you. The Charity understand the importance of financial well-being in relation to your own mental health and want to help you make it a priority. It may be that you just don’t know where to start, you don’t know what support is out there for you or how you can make that support work for your finances. Here is where the Electrical Industries Charity can help.

Since the beginning of the pandemic the charity have received a lot of calls from industry members wanting financial advice. Steve, the owner of a small electrical firm, wanted to understand how he could manage his outgoings with a limited income and a growing family. The welfare team spoke to Steve about the various options he had to alleviate some of the financial stress. During the pandemic many banks are offering ‘mortgage holidays’ to support their customers who have had their income stripped. Steve’s bank were able to offer Steve a mortgage payment holiday of three months during the pandemic meaning he did not have to make any mortgage payments during this period. This was a temporary financial relief for Steve and meant he could stop outgoings of over £550 a month. The charity welfare team helped Steve to put together a budget for the rest of his income and outgoings. Steve found that although it won’t be easy him and his family could live comfortably despite the pandemic. The Electrical Industries Charity was a supportive ear for Steve and provided guidance to help him keep financially well.

For those who have been struggling with debt prior to the pandemic this time has worsened their circumstances and meant they have been unable to keep up with repayments to debtors. Mo came to the Electrical Industries Charity unable to find his feet. He had several loans, including two pay-day loans, which he was still paying back at high interest rates and owed some family members small sums of money. Mo had been keeping on top of his repayments until he was furloughed from his electrical wholesaler job and then had to support a family and repay loans on just 80% of his income. Mo contacted the charity to understand what support he may be eligible for. The Electrical Industries Charity spoke with Mo about his repayments and his other outgoings. The welfare team advised Mo to prioritise his repayments and focus on getting the essential debts paid first. The team then referred him to StepChange, a debt charity which helps create manageable debt repayment plans between creditors and debtors. StepChange helped Mo to create repayment plans with each of his creditors meaning he could pay back only what he could afford during this period. Mo has since returned to work and has increased his repayments meaning he can look forward to becoming debt free in the future. It is important to remember that if the Electrical Industries Charity can’t help, they can point you towards an organisation which can and still support you while you attain assistance from them.

For others the coronavirus pandemic has meant their finances have been completely depleted. Ross had finished his apprenticeship and had started his own small electrical business in November 2019. When the pandemic began Ross discovered he was unable to apply for any of the furloughing payments as he had not been self-employed for a long enough period. With limited income and remaining outgoings Ross was unsure on what he could do to alleviate his financial burden and get himself back on track so contacted the Electrical Industries Charity. The Charity awarded Ross a small emergency financial grant to help subsidise his income and helped him to apply for universal credit as well a mortgage holiday. The Charity also then helped Ross to apply for a ‘bounceback loan’ to help his new business stay afloat. With construction sites back open Ross has now managed to return to work and his finances have begun to stabilise. He continues to have the ongoing support of The Electrical Industries Charity and has since felt a lot happier about his finances.

The last three months have been especially difficult on a lot of our finances. While we may have been awarded rental relief or cut down the cost of our commute, we have still had to adjust our budgets, tighten our belts and re-assess our outgoings. The Electrical Industries Charity champion financial well-being and are here to help you understand your finances. Steve, Mo and Ross are just three examples of how the Electrical Industries Charity can help but there a lot of other ways too.

 

Approximately £674 every minute is lost to bank transfer scams, new research from Which? has found. In the past year alone, victims lost a total of £354m, with most of it stolen from personal accounts.

There are many ways in which scammers attempt fraud. From ‘phishing emails’ – for example bogus messages letting you know about a recent inheritance win – to phone scams in which callers pretend to be from a trusted organisation, then ask to reconfirm your private details. Or holiday scammers ‘selling’ unwary people flights and advance fee scams, there is an ever-growing market for criminals to ply their wares. Here are some simple tips to stay protected:

Don’t trust strangers:
Fraudsters often pretend to be someone from a trustworthy profession, such as a policeman, a charity fundraiser or an employee at your bank. In the real world, these people will never ask you for sensitive information such as passwords and credit card numbers, so if they do, be suspicious.

Keep your tech up-to-date:
Computers are a popular target for fraudsters. Scammers can create websites containing malicious code and emails with viruses attached in an attempt to steal important details. Downloading the latest anti-virus software and using an up-to-date operating system will prevent most of these attacks.

Do your research:
If a deal catches your eye when you’re shopping online, be sure the vendor is reputable. If in doubt, do an online search for the company. Typing its name and the word ‘scam’ should bring up all the information you need; if people are complaining, buy elsewhere.

Paying in advance:
Fraudsters usually want your money quickly then make a swift exit. One way they do this is to ask people for money up-front, sometimes in exchange for nothing but promises. If someone sounds eager for payment, consider whether they are for real.

Passwords and pin numbers:
It’s good practice to use different passwords each time you create an account online. Using a single password means that if a fraudster cracks one account, they can gain access to the lot. Commit pin numbers to memory and don’t write them down. If you do fall victim to a scam your bank can protect you. Banks have introduced new systems to protect their customers from fraud.

Now, banks and payment providers will be required to follow a new set of standards to protect customers, including detecting high-risk payments, identifying vulnerable customers, and delaying or freezing payments that might be part of a scam. Both the bank who sent the payment and the one that receives it have a duty to take action. If you fall victim, and either bank has fallen short of these standards, your own bank will be required to refund your losses. Banks will also bring in a new security system, known as ‘confirmation of payee’, which will warn you if the name you enter doesn’t match the account details.

The new code is a huge step towards protecting consumers and ensuring victims aren’t out of pocket – but not everyone will benefit. Around 17 brands, covering 85% of all electronic transfers, have signed up so far. Customers of the following banks can rest assured that they’ll be protected by the new rules: Barclays, HSBC, First Direct, M&S Bank, Lloyds Bank, Bank of Scotland, Halifax, Metro Bank, Nationwide, Royal Bank of Scotland, NatWest, Ulster Bank, Starling Bank, Santander, Cahoot, Cater Allen.

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Contact your bank or building society straight away if you're worried someone might have access to your account. For example, if your:
• Card or security details have been lost or stolen
• Statement shows payments you don't recognise
• Card has reached its limit or account has gone into overdraft - and you weren't expecting it

If money has been taken from your account this is known as fraud and is illegal. When you contact your bank, they'll take action straight away to protect your account so no more money can be taken. For example, they might cancel your cards or cheque book and send you a replacement. You should also report the crime to the police through Action Fraud. They'll log it and give you a crime reference number.

Action Fraud
Telephone: 0300 123 2040
Textphone: 0300 123 2050
Monday to Friday, 8am to 8pm

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Living beyond your means is pretty easy to do these days, especially since we live in a time when buying on credit has become the norm. But just because it seems normal doesn’t mean you aren’t doing a real disservice to your current and future well-being.

Here are eight red flags that you’re living a lifestyle you simply can’t afford:

1 - You let fear dictate your spending:
We all know how terrible it feels to miss out (or be left out) of fun social events due to financial constraints. But don’t let your FOMO (fear of missing out) dictate your spending. “This can be as innocent as going out to eat when you’ve already exhausted your restaurant fund for the month, or as extreme as paying rent you can’t afford in order to keep up with your friends,” says Ruth Soukup, author of “Living Well, Spending Less: 12 Secrets to the Good Life.”

2 -You carry a balance on your credit card:
It’s not unusual to use a credit card as your primary method of payment. “Credit card companies offer all kinds of incentives to motivate consumers to use their cards,” says T. Michelle Jones, a vice president at Bryn Mawr Trust in Philadelphia. “It has become a way of life for many who no longer carry cash in their wallets.” And there’s no harm in doing so — and reaping those rewards points — as long as you’re paying off the balance each month. But if you carry a balance month to month, you’re spending more than you can afford. Get yourself back in the black in the next few months by doubling or tripling the minimum payment due, suggests consumer spending expert Andrea Woroch, and start carrying cash when you shop.

3 - You’re not saving at least 5%:
Everyone should save 10 to 15 percent of their total income. But if you can’t save at least 5 percent — even while paying off debt — this could be a sign that you’re living beyond your means. How to do this? Give up things in the short term to be successful in the long term, says Snyder. “If you cut back each month and don’t go out to eat, or to the movies, or whatever it takes for you to spend less, you will have more money to save.”

4 - You have no emergency fund:
Part of the reason you need savings is to pay, in cash, for those inevitable emergency purchases, like if your car dies or you get hit with an excruciatingly high vet bill. Putting these kinds of expenses on a credit card or financing them with a loan will continue the cycle of living beyond what you can afford. R. Joseph Ritter Jr., a financial planner and founder of Zacchaeus Financial Counseling in Hope Sound, Florida, suggests trying build an emergency fund of about $2,500 — that way, you at least have a cushion when an unexpected expense crops up. “Try to do this within six months, and set aside as much as possible each month toward the goal,” he advises. “This is not your total emergency fund. It is simply a place to start.”

5 - You’re leasing a car you can’t afford:
A major financial red flag is leasing a vehicle you cannot afford to buy outright or finance, says investment advisor and Registered Financial Consultant Carlos Dias Jr. “If you can’t own it, don’t lease it,” he advises. “Essentially you are renting a temporary lifestyle that will end and may require you to put down more money that you could have applied to owning a car.

6 - You don’t have any money left at the end of the month:
“People who live paycheck to paycheck often believe they can’t save money or spend less because their lifestyle has become a habit,” Woroch says.
An easy way to jump-start savings and become more conscious of your spending decisions, according to financial expert J. Money is to enact a no-spend month.
“Allow yourself to spend money only on the bare necessities for 30 days — rent, bills, groceries — and cut out everything else,” he says. “No clothes shopping, no eating out, and especially no Amazon binges. Nothing puts your finances in check more than a consumption detox.”

7 - You’ve paid an overdraft fee:
Overdraft fees are another sign that you’re spending money you quite literally do not have. To avoid getting dinged for overdraft charges, use the cash envelope system to control your spending. Divide expenses into categories that make sense to you — groceries, beauty, going out, and so on — and put cash in an envelope for each category. “When the cash [in a particular envelope] is gone, don’t use a credit or debit card,” he says. “Stop spending!”

8 - You’ve never set a budget:
“Having a written budget is one of the most important steps to financial freedom and living within your means,” Jones says. So if you’ve never set financial parameters for yourself — and you’re not filthy rich — chances are that you need to take an honest inventory of your income, spending, and savings goals. Not doing so will only cause you a great deal of stress, uncertainty, and even guilt. “Challenging a client to go ‘all cash’ for a month can be a wake-up call for someone who is not mindful or is in denial about his or her overspending,” says Brooklyn, New York-based financial planner Stephanie Genkin. Once you get a sense of your own patterns and habits you can work toward setting a realistic budget that allows you to save and spend more wisely.

So you've recognised the problem, but what can you do to dig yourself out? The website finty.com has a very helpful guide of Practical Financial Skills to Manage Money. We highly recommend this guide, which includes sections such as: "An introduction to money management", "How money can affect your mental health" and "Tips for having difficult conversations about money".

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Developing effective money habits are essential to financial wellbeing.

Habit 1: Avoid making financial decisions when emotional
Studies have found that people who are sad will pay more for something or sell it for less, compared with those who are in a normal emotional state. Being highly stressed can lead to impulsive or irrational financial decisions. In these situations, the age-old advice of “sleeping on it” makes a lot of sense.

Habit 2: Tune out the noise
Avoid looking at your financial position too much. As a general rule, look at your cash position weekly and your investment portfolio yearly. If you’re investing for a 40 or 50 year time horizon, why worry about what is happening this week, month or year? As the legendary fund manager Peter Lynch put it: “Far more money has been lost by investors preparing for corrections or trying to anticipate corrections, than has been lost in corrections.”

Habit 3: Just say NO 
Whether it’s a meal deal instead of just a sandwich or paint protection with your expensive new car, developing the habit of saying no to add-ons, upgrades or special deals stops you spending more money than you planned.

Habit 4: All pounds are equal
Research shows we treat money differently depending on where it comes from. We are more likely to spend a rebate than we are a bonus. Adopt the habit of treating all your inflows, whether salary and pension increases, tax rebates, bonuses or premium bond winnings the same as core income. That means directing it to the same spending priorities, including saving for your future self or reducing debt, as core income.

Habit 5: Forget Love Island
Watching a lot of reality TV or exposure to “lifestyle” social media has been found to increase people’s sense of inadequacy and insecurity, because they don’t conform to the unrealistic physical look or curated “perfect” lifestyles on show. This can lead to impulse and emotional spending to fill the void. If you can’t stop watching reality TV, at least be clear about what’s important to you in life and what matters.

Habit 6: Replace a bad habit with a good one
Your money habits may be highly ingrained, and you might think you can’t change. But, as long as you have a clear idea of what you stand for and what matters most in your life, you can then design your financial environment and routines so that it’s easier to develop habits that are conducive to your financial wellbeing. Swap regular bottles of wine for occasional drinking and use the saved money for a better habit.

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