Rebecca Duffett spoke with Aidan Vaughan

Aidan Vaughan

In the last decade the gap between the richest and the poorest got wider. Inequality is now at a record high. The incomes of the bottom 10% actually fell by £6 per week between 2002 and 2009 and the number of people living in severe poverty has risen by 900,000 in the past ten years. Responding to these issues, the Association of Christian Financial Advisors recently put a call out for Christians to break free of debt, ahead of Government spending cuts next year. Rebecca Duffett spoke with chairman Aidan Vaughan.

Rebecca: How much of a problem is debt especially within the Christian community?

Aidan: Debt is a major problem for our nation and if we looked at the crude figures, we have something like £952 billion of public sector debt and even more private sector debt. To put that into terms that we can all think about - just on the public sector side - that's equivalent to £38,000 per household. Now we're all part of churches, we're all normal people and I'm afraid that our debt is probably just as bad as everyone else's.

Rebecca: Why do you think this is? Shouldn't we be living by our faith, perhaps living slightly differently?

Aidan: I think so. I believe that as God's church we need to get hold of the Biblical principles of financial planning. We should be starting off with the premise that God owns everything. He owns us, he owns our world, he owns our universe and he owns our bank balances. We need to take on board what God says about debt - Proverbs 22: 7 says, 'the rich rule over the poor, and the borrower is the servant or slave to the lender'. Debt causes problems; it causes major problems. Debt can lead to worry, misery, crime and even suicide. On that last point, there was a recent survey by Christians Against Poverty that said that amongst their debt advised clients 38% had considered or attempted suicide as a way out.

Rebecca: Do you just advise Christians or do you advise a range of people?

Aidan: If I take my own example, I'm a wealth manager in Central London and very few of my clients are from churches. The emphasis that we give is really looking at things God's way. Quite often we all need to be given a bird's eye view; we need someone else just to come in and help us think about how planning God's way will impact on our lives. It might be that we don't go for that big mortgage; perhaps we don't go for the credit card; perhaps we plan a bit more. I would really like to encourage all of your listeners to set yourself a target, be it one, five, 10 years away, to be debt free, so you can declare your own jubilee.

Rebecca: We're going through Government cuts; what impact do you think this is going to have on people's finances? Should we be worried about the future?

Aidan: With God in our lives, we shouldn't be worried about our futures, but naturally money can get a grip of us. If we're one of the 2.45 million people unemployed we would be thinking, God where are you, we need your help? We just need to get that focus, because yes we are going to go through very difficult times. If I could give a brief example; I'm cycling through London this morning, there was some snow and rain and I got blown off course. What I did was, I looked up, saw the BT tower and then got back on track, back on my cycle track, which runs each side of the BT tower. That's what we need to do with our finances. We need to look at God, look at Jesus, look for that freedom in Christ and then say, please help me God; I really want to be looking forward to that time of debt free living. When you're debt free you can have that flexibility to be more generous and kind to people and have that freedom from worry.

Rebecca: This could benefit a lot of people.

Aidan: Oh yes, absolutely. Many of the ACFA members are involved in debt counselling. If we can't help you, we would direct you to debt counselling agencies that can. With all these things, it's really quantifying that problem and then being able to face up to it and saying how can we get through it? With God's help and with some help from Biblical planners or general planning you can get through.

Rebecca: Do you have any practical tips to help people save money that they might otherwise be spending on things that really aren't that important?

Aidan: I think we should all start with our budgets. We need to look at what we really need to spend, weekly and monthly. A good way to start is to write down for a week everything that you spend money on. Look at your bank statement and you will be surprised how much money we fritter away on things that we don't really need. It could be that you start taking sandwiches, as opposed to going to the sandwich shop. You can look at your life and then say, I need to do this and then the discretionary side can be limited.

Rebecca: How long do you think it will take for the economy to get back to normal?

Aidan: I would really like to say next year, but unfortunately we're looking at interest on debt peaking, believe it or not, in 2015-16. That's when total debt's going to be 70% of our gross domestic product. We've got a long haul, but if those people who've got money, if they're continuing to spend and to be generous then that will come somewhat sooner.

Rebecca: Will that mean that people who aren't earning as much money will start to go up the ladder?

Aidan: Yes, I do hope so. The fact of the matter is that quite a lot of us have got to get slightly poorer. We may not notice the change, but as inflation takes its course and wage rises stop going up as fast as we've known them, we're all going to be slightly poorer. If that means that our country has its finances balanced though then that would be a good thing.