Transformation

Broke: all about life in debt

The slippery slope into debt doesn’t happen by chance. It is premeditated by a billion pound industry that works hard to target young people, like my 18 year old self.

Kylie Walsh
16 March 2015
 Richard Davenport.

Still from Broke, by The Paper Birds. Credit: Richard Davenport.

KYLIE: It starts when I turn 18 and go off to university; I’m finally an adult and I’ve got a triple A credit rating! I get my first overdraft with the bank – I study, I buy CD’s, clothes, library fines and train fares home. And then three years later, I graduate. Yes, I’m leaving home for good now and I’m a prime target for more credit. I get my first credit card. I buy my first car, I start paying council tax, full price at the dentist; I get another credit card. By 2005, I’m 23 years old, working full time on minimum wage, and I’m £5,000 in debt, not even counting my student loan. I apply for credit card number 3, as its interest free for 12 months, and my mum says it will be a good idea cos it will help me clear my debts.”

I remember the letters through the door. Application forms for a credit card, already filled in with my details. All I needed to do was sign on the dotted line and pop it back in the post. Instinctively, I threw them away the first, second and maybe third times.

But something about the offer of an extra £1,000 excited me – I dreamed of hitting the high street and going on a spree. I’d never had access to such funds, £1,000 was like winning the lottery.

September arrived and I got dropped off at university. I set up my student bank account with an interest free overdraft. My mum advised me to open an ISA – ‘Beat the system’ she said, “live in your overdraft whilst your student loan is clocking up interest in an ISA.”

This approach didn’t last very long. I remember lining up in the queue at NatWest week after week, waiting to speak to an advisor about how much and why I needed to increase my overdraft. When they wouldn’t increase it any more, I switched to a rival bank who would lend me up to £2,700.

Now, I don’t want you to get the wrong impression. I’m not a lazy person, I work hard and I always have. I’ve inherited a prolific work ethic from a father who grew up as one of nine children in a single parent family in 1950’s Liverpool.

The slippery slope into debt doesn’t happen by chance. It is premeditated by a billion pound industry that works extremely hard to target young people like my 18 year old self. The minute I accepted the first credit card, another letter arrived enticing me to take out a second, and a third. And 10 years later I was struggling to keep up with the payments. Making the minimum required every month doesn’t make a dent. The interest only grows.

As theatre devisors and performers, we spend a lot of time in the rehearsal room intensively researching our area of stimulus. For our new show Broke, we talked about money. Each of the three performers has a different relationship to money, poverty and debt. Artistic Director Jemma McDonnell has always been able to save; she always had money left at the end of the month. Composer Shane Durrant, who grew up in a working class family, managed to become an adult who was careful with his earnings.

Yet my upbringing was the same – our family had very little money. What made the difference? My mum had always used credit to get by, and if you were clever, or careful, it was fine because you could pay it off or transfer it over to another amazing interest free deal. At one point, my mum was £28,000 in debt and had to declare herself insolvent.

That’s the thing about debt. It can run away with you. I always thought I'd be able to pay it all off miraculously with a big windfall or pay packet or some incredible stroke of luck. You don’t ever imagine yourself declaring yourself bankrupt. Or insolvent: admitting you can’t afford to pay back all this debt and coming to an Individual Voluntary Agreement (IVA) with your lenders.

Insolvency is the new bankruptcy. Though figures for the latter part of 2014 showed that individuals declaring bankruptcy are at the lowest since 2005, the rate of individuals signing themselves up to an IVA was the highest since the initiative was introduced in 1987.

Loan company Wonga has hit the headlines repeatedly in the past 18 months. They’ve been called out on many areas of their practice; lending to people who can’t afford to pay it back, sending threatening letters under the guise of debt recovery law firms, and finally, as a response to new industry legislation, slashing their workforce and axing a third of their staff.

The new legislation was the result of public campaigning for caps to the rules by which the payday lenders operate. In recent months, the new rules have been rolled out: predatory legal ‘loan sharks’ can only charge additional fees and costs to its debtors of up to 100% of the original loan. This goes someway to regulating the industry, but these companies continue to trap and entice the vulnerable.

In preparation for making a show about debt and poverty, my colleagues and I spoke with people who were living below the poverty line. Listening to people’s stories in the food banks and Salvation Army halls of West Yorkshire, I heard about what it is like to live on £72.40 a week. One person told me: “You’re born into poverty, it’s not just homeless people, that’s a misunderstanding. And its people who are on minimum wage, they just can’t make their money go far enough.”

I listened to stories about what they can and can’t afford, about going without, about walking 5 miles into town to visit the Salvation Army to get a hot meal.

What do you do when you need to make your minimum payments, heat and light your home, leave enough to eat and drink and maybe save some for a bus fare or two to get you out of those same four walls? The temptation to take out more credit is strong, and with payday loan companies and online loan websites clambering over themselves to lend out more money on fixed interest rates of 419.83% a year, you’d be tempted.

With austerity measures in full swing, people can’t afford to pay back what they owe. It’s almost become a cliché to hear that the people at the bottom are being hit the hardest while the people at the top are becoming more and more comfortable.

But a cliché often arises because it’s true. People who need to visit the Salvation Army simply to get a hot meal aren’t the ones who can solve the financial crisis and reduce the deficit. Saving a few pounds by sanctioning someone’s benefits won’t plummet us back into a healthy GDP.

So after a year of researching, meeting and sharing the stories of people living below the poverty line, what do I take away? For me, the thing that remains with me is the human aspect of the people I met. They are resilient, they will suck it up and get on with life. They might harbour bitterness and they might play the lottery or go to the Bingo to try and maximise their chances of striking rich, but this is the hand they’ve been dealt.

The media often demonize benefit claimants. The ‘scrounger culture’ bias that clogs up the airwaves encourages us to look down on the people who feed off us 'law abiding tax payers'.

But we forget that these ‘scroungers’ didn’t fall into their situation overnight. The collapse of traditional industries, mass unemployment and a greedy and unjust debt industry are all responsible. By listening to peoples' stories, and bringing them to the stage, we can help create change. 

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