Christmas is just around the corner and, for many, the season of giving is an exciting time. However, if you are struggling with money it can be stressful to think about affording gifts and treats alongside your usual household outgoings. It is very easy to fall into the trap of expensive, doorstep loans at this time of the year.
Doorstop loans like those offered by Provident are extremely expensive, due to having high interest rates. The rates are so high because of the risk they pose to the lender of giving money to people with poor or no credit. This means you could end up paying back a significant amount of money in interest and costs, as well as the original loan amount.
We hear lots of stories where tenants borrow money from these lenders to pay for Christmas and end up paying back double the amount over the next year, then repeating the process over and over. It’s an easy cycle to get yourself into.
Instead of using expensive lenders, if you need to take out a loan, you should look to use an affordable lender such as Credit Unions. Dragonsavers Credit Union offers a safe place to save and access to affordable loans to those living in Rhondda Cynon Taff or working anywhere in Wales and anyone living in the same household as a member.
To find out how you can save or borrow with Dragonsavers Credit Union, visit their website www.dragonsavers.org or call 01443 777043.
Another way to save and receive help, is through the Government’s Help to Save scheme that is available to help low-income earners claiming Universal Credit or working tax credits.
With the Help to Save scheme you can save between £1 and £50 per month and don’t have to pay in every month. You can pay in as many times as you like but can’t exceed £50 each month.
After two years, you will receive a 50% bonus payment of the highest balance you achieve in this period, paid into your bank account (not your Help to Save account). You can then decide to stop saving or continue saving for another two years. After four years, you will receive another 50% bonus of the difference between the highest balance achieved during the first two years and the highest balance during the third and fourth years.
You can withdraw money at any point but the more you withdraw, the harder it will be to receive the highest amount in your bonuses. You can also close your account at any time but if you close it early, you’ll miss your next bonus and not be able to reopen another one. After four years, your account will close, and you will keep the money from your account. You will not be able to reopen it or open another.
To apply for a Help to Save scheme account, visit the Government website www.gov.uk/get-help-savings-low-income
When you think about saving for Christmas 2021, select the affordable lenders and saving schemes that are there to help you. Don’t get caught out.
Remember, Trivallis no longer offers rent-free weeks, which means rent payments are due every week of the year. There is no doubt everyone deserves a special Christmas but missing payments for your rent and bills, in December and January, could result in you being behind before the New Year.
For more information on how Trivallis’ Money Advice Team can support you, visit www.trivallis.co.uk/money-advice-team or call 03000 030 888.