The issue of deficit budgets is one of the biggest challenges encountered by churches tackling poverty today. At Christians Against Poverty, we work in partnership with more than 800 local churches, and our new research has uncovered the devastating impact on both those struggling to afford essential costs, and those seeking to support them.
A deficit budget happens when a household’s income (whether from wages or benefits) isn’t enough to cover essential living costs, such as rent, utility bills, food and clothing.
Almost half (47%) of those who seek help from CAP have a deficit budget, and would need, on average, an additional £273 per month in income to make their budget balance.
With household incomes not matching the current cost of essential goods and services, the cost to stay alive is, for many, unaffordable. But while the reality seems bleak, local churches across the UK’s four nations are going above and beyond to support people in need. Melinda was supported by her local church and CAP to face her financial challenges head on.
‘Having God in my life and a church community around me has made a world of difference.’
Melinda
Our latest briefing paper,‘Deficit budgets: The cost to stay alive’ explores the severe consequences of deficit budgets in households across the UK and pushes for urgent systemic change.
James, who features in the new report from CAP exploring the impact of deficit budgets, shares how he ended up in an impossible situation:
‘Around 2011, I was working as a plasterer,’ James recalls. ‘The problem was that the work was drying up. I remember driving to work one day and seeing an advert on the side of a bus that said “Earn £500 a week as a bus driver”. I thought I’d give it a go and signed up, but it turned out there was small print – I’d only earn £500 a week after several years of training and doing a heap of overtime. So while I was training, I got about £800 a month and my rent at the time was £850. On top of that, there was Council Tax and utility bills to pay. I wasn’t earning enough to pay the rent, never mind anything else.
‘In the end, I had to pay the bills so I took out payday loans. With no money to pay them back, and interest being added on at an extortionate rate, my financial situation spiralled. I couldn’t keep up with it. If I didn’t make a payment at the end of the first month, that’s when the interest kicked in, and then that was it, I was done. I was robbing Peter to pay Paul just to make it through.’
‘[For clients facing deficit budgets], their fundamental issue is low income. It remains low income. They have debt trying to survive, and they will get back into debt’.
CAP Debt Coach
Michelle, who also features in the new report, describes the profound personal impact that living on a deficit budget had on her mental health:
‘When I was in debt, I went through depression,’ says Michelle, ‘I was a Christian but I lost my way. I got to a point where I didn’t believe because I thought, “Lord, you can’t put me through this”
‘I was threatened by a County Court Judgement and I became too scared to open my door just in case it was someone demanding money. I tried to take my life twice. And then when I was in the hospital, it was a matter of, “Stop and think of your children”.’
The effects of life on a deficit budget stretch far beyond the individual in difficulty. Family, friends and those providing support are also feeling the pressure of a broken economy. 1 in 10 UK adults say their financial difficulty had a negative effect on their loved ones.
‘People are survivors – they will find a way to survive. And they may choose to do things that you would hope no human being would ever have to choose to do.’
CAP Debt Coach
There’s an undeniable link between deficit budgets and a person’s health, wellbeing, living standards and relationships, which in turn means a greater need for public services and support. It’s no secret that mental health services and the NHS are at their limits, and the unbearable pressure people are facing as a result of their financial situation certainly isn’t helping.
‘As a country, we’re at breaking point with people’s finances, and no matter how much advice CAP or anyone else gives, it still doesn’t address the root cause of the issue.’
Stu, who features in CAP’s new report
More and more often, churches are finding themselves standing in the gap for overstretched public services, such as mental health support and food banks. As well as debt advice, the churches CAP partners with now commonly provide:
Emergency aid (where available), such as food shops and fuel vouchers, mostly funded by the church itself
Emotional support, often caring for people with multiple complex needs
Food banks and clothing banks
Referrals to additional support in the local area, requiring strong relationships with other organisations and charities
While fixing someone’s financial situation can be a long road, the work being done through churches is transforming lives. Breaking the isolation that many in financial difficulty face is just one of the ways churches are making a difference. By providing face-to-face debt help, they’re in a position to see what’s going on more widely in the person’s life, and address those issues head on. They’re able to support people mentally and emotionally, and in many cases extend an invitation to a church service or event, where those who were isolated find community, friendship and purpose.
Melinda, who features in CAP’s new report, recalls her first visit with Peter and Jill from the local church:
‘The first time Peter and Jill from CAP visited, I didn’t own a sofa, so there weren’t enough seats for us all to sit on,’ says Melinda. ‘Peter immediately started thinking about how he could help me, beyond the debt, and he was able to get a lovely, comfortable sofa for my flat. Both he and Jill were supportive, helpful and understanding right from the start.
‘Peter invited me to his church, and I’ve been going regularly ever since. Attending church gives me something to look forward to as I live by myself and don’t have anyone to talk to. I still have struggles with low income and my mental health, but having God in my life and a church community around me has made a world of difference.’
84% of CAP’s local debt coaches say that they are able to refer people on to additional support in their area, such as food banks?
Solving the issue of deficit budgets will take systemic and structural change, and our new report explores the recommendations we’re making, but we thank God that his Church is here to bring hope and practical on-the-ground support in the meantime. Whether it’s providing holistic support, standing in the gap for local services or being there for people in their darkest moments, the power of Christians showing God’s love in action is shining more brightly than ever.
As deficit budgets become increasingly common, more churches are vitally needed to support those struggling with their finances. Find out how your church can partner with CAP and bring life in all its fullness to your community.
If you’re struggling with a deficit budget, explore our blog, ‘Five ways to cope when you’re living on a deficit budget’ for more advice.
