The financial demands of life out of uniform can overwhelm those who have served in the armed forces
James Fry is only 23 but has seen a lot of life. As well as being a dad, he’s an army veteran who served in Bosnia and Afghanistan. He lost a few friends in Afghanistan, and the psychological wounds he suffered during his seven months there led to him being diagnosed with post-traumatic stress disorder. However, returning to civilian life threw up a whole new set of challenges, many of them financial.
More than 20,000 people leave the armed forces every year and many find the transition to life outside the military difficult. Fry left the army in November 2010, and within months was struggling with his debts and being pursued by bailiffs, having been unable to find much in the way of work.
Now, however, things are looking a lot brighter, thanks in large part to the financial assistance and advice he received from the Royal British Legion’s benefits and money advice service (BMA), which is run in partnership with Citizens Advice.
The BMA awarded him £1,800 to pay off some of what he owed, offered him advice on debt management and played a key role in helping to get thousands of pounds of debts written off, thereby giving him and his partner some financial breathing space.
Fry is one of more than 35,000 people who have been helped by the BMA since 2007, and with this year’s Poppy Appeal underway, and Remembrance Sunday tomorrow, the Legion is keen to let the public know that when they buy a poppy or make a donation, this is one of the vital services their money is funding.
The BMA helps former and serving armed forces personnel facing financial trouble, which could be anything from short-term cash flow issues to major debts. Since launching five years ago, the service has put about £112m into the pockets of armed forces families through a combination of claiming benefits they are entitled to, writing off debts for those struggling to cope and gaining grants. Demand for the service has increased steadily since the economic downturn and government spending cuts kicked in.
The bulk of those helped by the BMA – about 70% – are ex-service personnel (around 10% are currently serving, and 20% are families/dependants), which perhaps shows how many find the adjustment to civilian life hard, particularly if they have gone straight into the services from school. They become used to decisions being made for them and having some of their costs subsidised – then, when they leave, they can struggle to get to grips with money. Last year the Legion published research showing that almost a third of the debt problems it deals with involves unsecured loans from payday lenders and other providers.
The BMA says a military life “involves unique challenges that can lead to money problems”. However, an article in the summer 2012 issue of Homeport, a magazine distributed by the Royal Navy and Royal Marines to naval families, put it a lot more bluntly. It said “the inability to manage personal finances” was one of the biggest welfare challenges facing members of the armed forces, and claimed: “This is not so much a problem of lack of income, but rather lack of control in budgeting, naivety in financial dealings, ignorance about financial products and where to find information, and sometimes a reckless attitude towards spending.”
To help improve this, the Royal British Legion has been working with the Standard Life Charitable Trust on a project called MoneyForce that will include a website aimed at improving financial skills among members of the armed forces.
Fry says of the BMA: “They helped me a great deal. If they hadn’t, I don’t know where I’d be right now. The Royal British Legion helped me a lot more than anyone else has.”
Fry joined the army when he was 17 and served with 23 Pioneer Regiment, based in Oxfordshire. Asked about his time in Afghanistan, he says: “It wasn’t the greatest of experiences … It kind of messed me up. My doctor seemed to think I’ve got post-traumatic stress disorder (PTSD), anxiety and depression. I’m on plenty of tablets to calm me down.”
He has been in contact with veterans’ charity Combat Stress and on Tuesday this week was assessed by a psychiatrist, who officially diagnosed him with PTSD.
Fry, who lives with partner Elisha Hinckley and their 15-month-old son Alfie in Basildon, Essex, says that when he first left the army in late 2010, he managed to get a driving job delivering parcels, but that work had dried up after Christmas that year.
By February 2011 he was struggling financially and needed assistance with his rent and council tax arrears. After being helped by the BMA, that same year, he worked at a tractor plant for a spell, but the company ended his contract at about the same time his son was born, which left them in a very difficult situation financially.
“Everything collapsed at that point, and since then it’s been difficult. We couldn’t afford to basically survive – we were living on literally nothing.”
In September 2011 he called on the BMA again. He had tried to go back to work but his health issues made this difficult, and he was being pursued by bailiffs. The BMA was able to take action to ensure the issue was resolved and that Fry could continue with a more manageable debt plan. He later returned to the BMA for help in ensuring he was getting the right benefits, and he now receives employment and support allowance. Meanwhile, his doctor has signed him off work.
Fry’s continuing financial difficulties led to him seeking bankruptcy during the summer. The BMA funded the fees for this and assisted with the paperwork. As a result more than £10,000 of non-priority debts were written off.
Asked how he felt about becoming bankrupt, he says: “It makes you feel useless in some ways. I’ve been really independent – I was earning £1,400 a month with the army, I was paying my bills … It feels terrible when you go through all this money you owe. A judge asks you, ‘Are you sure you want to go bankrupt?’ But once you walk out of that building, you feel a big release. I can get on with my life. In a year’s time, when the bankruptcy is over, I can get myself back on track.”
He’s not sure what the future holds, though he says: “I want to earn money and pay my own way.” However, getting qualifications takes money. In the meantime, he has been doing some volunteering for a local scout group. One time, he took his medals along so the children could see them.
He says that schoolchildren tend to learn a lot about the second world war, but adds: “Kids need to realise that it’s not just about old people. It’s also about young people, and those who have left the army who suffer with medical conditions.”
Who to turn to for help
If you are struggling with paying your debts, seek advice from a free debt counselling service, such as Citizens Advice, National Debtline or StepChange Debt Charity.
Advisers at these services can help you work out what to do, establish a realistic budget and negotiate with your creditors to reduce your monthly outlay.
Do not borrow from a doorstep/payday lender for a short-term solution. These loans may be quick and easy but they are usually hideously expensive, with interest rates that can easily hit 4,214%. Likewise, try to avoid going into an unauthorised overdraft.
The Guardian’s website has a factsheet on debt advice services.
There are other options for getting your debts sorted out. What may be best for you will depend on your individual situation and how deeply in debt you are.
Lots of organisations offer debt management plans. These are agreements between you and your creditors to pay all of your debts, where you make regular payments. The company then shares this money out between your creditors. Only set up a plan with a company licensed by the Office of Fair Trading, and make sure you understand the costs.
With an individual voluntary arrangement you agree to make regular payments to an insolvency practitioner, who divides this money between your creditors. Again, be clear about the fees. Meanwhile, a debt relief order (DRO) is an option open to someone who can’t pay their debts, owes less than £15,000 and has little in the way of assets or income. You get a DRO from the Official Receiver, but you must apply through a debt adviser. If you get a DRO, your creditors cannot recover their money without the court’s permission, and you are usually discharged from your debts after 12 months.
Then there is bankruptcy. You can apply to the court if you are unable to pay your debts. “Becoming bankrupt will have a serious effect on your life,” warns the official gov.uk website.
The Guardian’s website has a factsheet on IVAs and bankruptcy.
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