Spending our way to heartbreak and homelessness
The credit bubble is bursting and tens of thousands of people face the heartbreak of repossession, top business journalist Jeff Randall reveals in a shocking documentary for ITV1.
With higher interest rates and the banks pulling the plug on easy credit following the credit crunch, Britons are about to learn the harsh realities of spending money they haven’t got.
Repossession, Repossession, Repossession an hour-long special, looks at how the country has been hooked on spending over the last decade.
It shows the good times are set to end for many people who face being made bankrupt and having their homes repossessed.
Jeff said: “I’ve been warning about the dangers of excessive debt for years. Now the day of reckoning has arrived.
“This programme reveals why our borrow and spend obsession is turning to heartbreak and repossession."
Mark and Diane’s story – handing over the keys of their home for the last time
The cameras follow a West Midlands family packing their belongings and handing over the keys of their home to the bailiffs.
Mark and his wife Diane built up a mountain of debt when they struggled for a number of years to pay the mortgage.
Diane tells the programme: “We’d never, ever think anything like this would happen…you read about it happening to other people but we always said it would never happen to us and it did.”
The couple bought their home in 2000 with a £27,000 mortgage. But their problems began when they were allowed to borrow more to make the repayments and keep their heads above water.
By the time they had lost the battle, their debts had soared to £142,000 and even though they were bankrupt the banks continued sending offers of new mortgages and loans.
Mark said: “All the years of struggling and, thinking back, trying to buy the house in the first place. All for nothing.”
Shelley’s story – smoothing out laughter lines but she’s not laughing now
Model and dancer Shelley also features in the programme. Shelley likes to look good – but it comes at a price which she usually pays using credit.
She tells the programme: “It’s like anybody with an addiction. That’s my addiction, just shopping and spending and just enjoying myself really.”
The glamour girl likes to live a celebrity lifestyle – but hasn’t got the financial means of a celeb. She reveals she has spent cash on injections to smooth out her laughter lines which meant she went over her overdraft.
Shelley knows she’s in financial trouble but doesn’t realise just how bad it is until she meets debt advisor Mike Thomas, known as the debt Wizard who tells her she owes £41,000.
Mike says of Britain’s debt: “We don’t have a debt problem we have a debt crisis. And this means that more and more are lying to their loved ones, their partners, their spouses, they’re turning to gambling, alcohol to try to resolve their problems. And many I see tell me they’re suicidal and very, very depressed.
Jamie’s story – First card led to more not so fantastic plastic
Jamie,23, works for the ambulance service in Manchester and was just 18 when he was given his first credit card. This was followed by more cards and then loans to pay off his mounting debts. After a four-year spending spree he’s clocked up a debt of more than £17,000.
He said: “It was mainly for clothes and for paying for my friends to go out and have nights out, paying for a holiday. And at the time you think, oh I know best I can afford it all. You’ll just end up in a mess. And I know from first hand that’s what happened to me.
“Some people who commit murder these days and don’t have to serve 20 years in jail whereas I’m stuck with a 20-year sentence paying off all these debts.
Adrian’s story – racehorses, cars and holidays
Furniture retailer Adrian from Nottinghamshire is living his dream – he owns several racehorses and a third share in a riding stables. He recently bought a racehorse on his credit card.
It doesn’t stop there – Adrian likes the finer things in life such as cars, eating out and, last year, five holidays.
He tells the programme: “You only live once, don’t you? So you may as well live for the moment rather than being the richest person in the graveyard.”
He has built up a staggering £1 million debt on credit cards, mortgages and an overdraft and estimates he currently only has enough income to cover half the repayments – but he doesn’t seem too worried.
“If someone lends me the money it becomes their problem, they’ve gotta get their money back, now I’m gonna do my damnedest to pay it back but I’m certainly not going to lose any sleep over it.”
Who is to blame for Britain’s debt crisis?
Lenders have been portrayed as villains in the debt crisis but big banks tell the programme they have acted responsibly.
Gary Hoffman, group vice-chairman of Barclays, explained: “People binge eat, they binge drink, sometimes they spend, sometimes they binge borrow and what I encourage, what Barclays encourage, is for customers to talk to us when they have a problem.”
Jeff Randall visits the UK’s biggest credit reference agency Experian who store every detail of our financial lives and keep them on file for years. The banks use this information to help them decide whether to give credit.
So why have the banks lent so much to so many people who can’t repay the cash?
Jeff explains: “We’ve been on a borrowing binge and they’ve been on a lending frenzy. The more the banks lent the higher they thought their profits would be.”
But the government also bears some responsibility for fostering a debt culture, says Jeff. Student loans, for example, may have introduced a whole generation to debt.
National Union of Students vice president Wes Streeting, who graduated three years ago, said: “I’m actually in with a combination of my student loan, a graduate loan I took out upon my graduation, my overdraft and credit cards.
“It all amounts to a whopping sum of £24,000 which is £1,000 for every year I’ve been on the planet. So it’s quite a large amount of debt hanging over my head.”
Social analyst Jim Murphy says: “We have a set of expectations that ratchet ever higher, and the notion that we should be denied any of these things because we haven’t saved enough for example, that notion has long gone."
