ACCORDING to the latest numbers released by the Scottish Government, a growing number of people are living in financial hardship.

Between 2014 and 2017 860,000 people - the equivalent of 16 per cent of the population - were deemed to be living in relative poverty, which means they are getting by on 60 per cent or less of the median UK income.

Because the premium poorer people pay to access goods and services is known to exacerbate their poverty, many falling into that bracket will be forced to take on debt just to feed their families or heat their homes.

When that debt comes from a high-cost credit provider, who prey on those with limited financial choices and discriminate against those with poor credit histories, the poverty becomes self-perpetuating.

There is a financial market there to help, with credit unions and providers such as Scotcash, Fair for You and Conduit Scotland among those offering an alternative to high-cost credit on a not-for-profit basis.

According to Jennifer Tankard, chief executive of industry body Responsible Finance, there is a lot more to be done, though, which is why she has welcomed the move by Hollywood actor Michael Sheen to bring the issue into the public’s consciousness in a bid to find a wide-reaching solution.

“Economic instability, squeezed household budgets, and living costs outstripping incomes have exacerbated the precarious position of many in the UK,” Ms Tankard said.

“Access to affordable credit from responsible finance providers helped 55,348 people [in the UK] on low incomes, with no savings buffer, to avoid taking on high-cost unmanageable debt in 2016-17

“But the UK’s responsible finance providers could do even more.”

Speaking at the Responsible Finance conference held in Glasgow this week, John Chalmers, chair of Carnegie UK Trust’s affordable credit action group, stressed that it would not be easy to solve the “complex problems” associated with high-cost debt.

For Ashwin Kumar, chief economist at the Joseph Rowntree Foundation, part of the problem is that those at the bottom of the income scale are discriminated against because the UK economy is built on a “very long tail of low-productivity firms”.

Such firms are themselves discriminated against by the mainstream finance sector, whose unwillingness to lend stops them increasing productivity and so wages.

“We have a low-wage problem - far too many people are stuck on low wages in the UK,” Mr Kumar said.

Susan Aktemel, director of social letting agency Homes for Good, has experienced similar problems.

“When I wanted to raise money to buy houses to renovate all the high-street banks said no because they felt it was too risky, especially because we would be renting to people on low incomes,” she said.

A knock-on effect is that people are kept in poverty, with the impact that has on their mental health making it difficult for them to make choices that could at least ease some of the financial burden.

“Because we work with people on low incomes every day [we see that] there are wider barriers they have that aren’t being addressed or considered,” Ms Aktemel said.

“What if you’re not confident using a computer or filling out forms? What happens if you’re not confident about picking up the phone or walking into an office to tell a stranger about your history to get a product?

“If you don’t feel you can get up in the morning how do you get on the phone or online to organise finance?”

These issues are too big for the responsible finance industry to solve, but what the sector can offer is the potential to stop personal debt from spiralling out of control.

After all, the point of Mr Sheen’s End High Cost Credit Alliance, and the focus of the responsible finance sector more generally, is not to stop people from using credit to help them live their lives but rather to ensure the debt they do take on is appropriate, affordable and, crucially, not exploitative.

As Mr Chalmers said: “I’m not saying personal debt is necessarily a bad thing - it has become an important part of how the economy works - but to be lent to responsibly and not being encouraged to take on a product that is likely to end in disaster is an important part of the equation.”