Archive for October, 2010

Many being chased for loans they did not take out

Thursday, October 28th, 2010

It has been revealed in a recent report that thousands of Brits are being chased for loans that they never took out in the first place. The reports claim that at least five thousand people in the UK are being chased by debt collectors who are working on behalf of a payday loan firm. However, they are being pursued for money that they never borrowed according to officials.

It is thought by police authorities that this is linked to identity theft, and that the loans were actually taken out by fraudsters that were using the personal details of the Brits that are now getting the blame. The company that is sending the debt collectors to pursue these people is Help Loan, which is based in Finland. Help Loan claims that it has cost at least £1.5 million as a result of this fraud.

Help Loan is now said to have taken steps to increase security, due to the ease with which the fraudsters managed to take out loans using others’ details. The company only started trading in the UK earlier this year, and offers working consumers short term loans of between £50 and £300, which must be repaid within twenty eight days and with very high rates of interest.

One of the Brits that has been pursued for a loan that was never taken out said that the company needs to improve its verification processes to try and reduce the risk of this sort of fraud. She said she had received a demand for repayment of a loan, and when she checked with the company they had her correct date of birth but had bank details that were not hers.

She said: “They need to make their whole site a lot more secure and be sure that the person who is applying for the loan is the person they say they are.”

Tags: personal details, company, site, Financial services, brits, theft, Interest

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Mortgage lending remains subdued

Thursday, October 28th, 2010

The British Bankers’ Association has reported that mortgage lending remains subdued, and the decline in mortgage lending approvals continued in September. Concerns over the budget and government cutbacks is said to be having a serious effect on mortgage and other forms of lending, with many households being cautious in the current climate and shunning new borrowing.

The BBA said that based on the figures for September, and given the low level of consumer confidence stemming from the budget and spending cuts, activity in  the housing market was likely to remain subdued in the months to come, and in addition to mortgage lending being affected there was little appetite for other types of finances at present including personal loans.

With the low demand for borrowing continuing the number of new mortgages approved for September fell from the previous month to 31,104. The BBA said that this was below average compared to the last six months. The BBA said that the low appetite for borrowing was also being seen with other forms of finance such as unsecured lending, with many too cautious to lumber themselves with more debt in the current climate.

The Spending Review that was announced by the chancellor George Osborne recently is likely to hit consumer confidence hard, as it will increase fears about job losses amongst other things. This will further hit consumers’ appetite for borrowing, and could see figures slide even further.

BBA statistics director David Dooks said: “Subdued mortgage activity and little demand for unsecured credit are a reflection of household uncertainties ahead of the Spending Review. Demand for new mortgages remains low despite more properties on the market and falling house prices.”       

Tags: credit, hit, debt, uncertainties, personal loans, unsecured debt, current climate

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Consumer continue to borrow from friends

Thursday, October 28th, 2010

Officials have warned that consumers across the UK are getting themselves into an even worse situation when it comes to their debts, with many continuing to borrow from friends. Research into so called ‘friend debt’ was carried out by the Post Office, and officials from the Post Office said that the recession and lack of traditional finance had seen a surge in the number of people borrowing from friends.

The results of the study showed that shockingly consumers had borrowed more than £7 billion from their friends in order to tide them over when they were short of money. The study looked at borrowing and lending trends between adults, and more than a quarter of those that were polled as part of the survey said that they had given cash to an average of four friends in the past twelve months, and had agreed to have the money back at a later date.

The average amount that was lent for each loan worked out to £133 according to the survey results. However, whilst the money was handed out in good faith as a loan the research also showed that less than half of the money that was handed out had been repaid leaving an outstanding balance of just under £3 billion between friends.

The results also showed that around 18 percent of people were lending more money than they could really afford to, leaving themselves in financial trouble to help friends out. In some cases the recipient of the loan was repaying friends by other means such as with alcohol rather than repaying the cash.

Doug Strachan, director of financial services at the organisation, said: “The Post Office is urging people to make sure they don’t put themselves, or their household, into financial difficulty when helping others.”

Tags: friend, Money, balance, half, Research, difficulty, faith

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Government cuts set to set debt soaring

Thursday, October 28th, 2010

It has been claimed that the recent cuts that have been outlined by the coalition government will result in personal debt levels soaring. The government recently outlined its comprehensive spending review, which included huge cutbacks in the public sector, which will then have a knock on effect on parts of the private sector, increases in VAT, cuts in welfare and benefits, and other measures that are designed to reduce the public deficit.

The Consumer Credit Counselling Service has said that the various cutbacks that have been put forward by the government will result in many people struggling with their finances, and will most likely result in a huge increase in the number of people that are experiencing problems with their personal debts.

The charity said that of all of the people it helped last year only 25 percent had been able to pay off their borrowing, and this trend had continued over the course of this year. Many state workers will find themselves in a position where they are struggling to repay their debts due to the sweeping job losses, and this could also affect many private sector workers who are affected by the cutbacks.

The charity also said that many of the people that are expected to seek help with their debt problems later this year and into next year are likely to be people that had been repaying their debts okay up until now but would struggle as a result of losing hours or losing their jobs.

Officials from the CCCS said that anyone that does find themselves in a position where they are struggling with their debt should ensure that they contact a charity such as the CCCS rather than going to a debt company that charges for advice and assistance.

Tags: various cutbacks, likely result, state, review, business, course, borrowing

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Personal debt issues could hit public sector workers

Thursday, October 21st, 2010

According to some industry experts many public sector workers could face rising levels of personal debt as a result of the many cutbacks that have been made by the coalition government. Having outlined the cutbacks in his emergency budge earlier this year the Chancellor of the Exchequer, George Osborne, was more specific about his cutbacks in his Spending Review in October, and there are fears that there could be around half a million job losses in the public sector.

The Consumer Credit Counselling Service has said that more and more people will have to face up to personal debt issues, and since the government cutbacks will also have a knock on effect on the private sector there will be many people that will struggle with their debts due to job losses and cuts in their hours.

Many people are already struggling when it comes to managing their debts because of the problems caused by the recession and the global financial crisis. With the cutbacks that many people now face at their places of work the problem could become even worse, and a rising number of people will be considering insolvency, debt management plans, and other solutions to enable them to deal with their debts.

The Consumer Credit Counselling Service has said that anyone that is concerned about repayment of their debts is advised to contact them or a similar debt charity so that a solution can be reached with regards to how the debt issues can be handled.

One official from the service stated: “I would urge anyone struggling to repay their debts to seek help from a charity such as CCCS or Citizens Advice who can provide free advice and support.”

Tags: Personal finance, Spending Review, job, Consumer Credit Counselling Service, Chancellor of the Exchequer, finance, debt

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House sales fall again in September

Thursday, October 21st, 2010

It has been reported that property sales for the month of September fell for a second month in a row in September. The figures relating to property sales were released by HM Revenue and Customs, and showed that in September the number of completed sales fell to just 78,000. This compared to 82,000 in August, and was also lower than the figure seen in September of last year.

This is said to be the first year on year drop in sales since the start of the year, and comes following increased difficulties for those that are looking to take out a mortgage, with continued restrictions within the mortgage sector. The Bank of England has said that mortgage lending has become increasingly difficult, and that lending levels are likely to become increasingly subdued over the coming months. The Council of Mortgage Lenders said that total mortgage lending for September this year came to £12 billion, which was the lowest September figure since 2000.

A number of surveys and reports have been released recently, and many have shown that there has been a stop in mortgage lending and a fall in property prices, which have been fuelled by the drop in property purchases. On the other hand rental prices are said to have increased as a result of the high demand for rental properties from the many people that are not able to get a mortgage to buy a place of their own.

One housing industry expert said: “To see the number fall from 12 months ago is a worry. If transaction volumes continue to fall then we will see even greater uncertainty in house prices in the coming months making it harder for those who have to sell to find a willing buyer.”

Tags: Sales, property, finance, mortgage

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Cut the cost of Christmas to avoid debt

Tuesday, October 19th, 2010

Every year many people overindulge when it comes to Christmas spending, and many spend a huge amount of money on things such as gifts, which leaves them facing huge debts once Christmas is over if they have used credit to buy their presents.

The cost of gifts for Christmas can really add up, and these days most people can ill afford the debt that they already have never mind adding to it by buying more costly gifts for friends and relations. It is therefore worth thinking about how you can cut back on gifts and reduce the amount that you spend on them to avoid getting into too much debt after the Christmas period is over.

Whether you are paying for Christmas on credit or whether you are using your own money or savings you can really benefit from cutting back on the cost of gifts. In fact, you may find that you don’t have to buy new gifts for everyone, because you may have gifts that people have given you in the past that you can re-gift. In the current climate more and more people are re-gifting, using gifts previously given to them to give to others, and this is fine as long as you don’t end up giving the gift back to the person that gave it to you in the first place!

For those that do have to buy gifts from scratch there are a number of options that could save you money on the cost of presents. One idea is to go on auction sites to get your gifts, with places such as eBay offering a huge selection of items often at really cheap prices. You can get items that are nearly or brand new, and by bidding or finding the right ‘buy now’ deal you could save a fortune on the cost.

The internet also offers access to a vast range of goods and products often at knock down prices, and this can help you to save a fortune on the cost of your presents, especially if you are buying for a large number of people. You can compare prices from a range of retailers not only within the UK but also from other destinations around the world. This vast choice means that you can find something that is perfectly suited to your loved ones and you can get it at a knock down price, get it delivered to your door, save money, and avoid the hassle of queues.

Tags: Christmas, Gift

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Increase the chances of getting a loan

Tuesday, October 19th, 2010

For many people these days getting a loan has become increasingly difficult, and this is partly due to the fact that lenders are being so stringent when it comes to lending criteria. With many people desperate to get finance it has become increasingly important for those looking for a loan to do all that they can to boost their chances of success.

There may be many people that are looking for a loan in the run up to Christmas, and with so many people worried about their finances for Christmas many may be relying on getting a loan in order to fund their Christmas spending and purchases.

It is important that you do not apply for a loan if you do not stand much of a chance of getting it, as this could adversely affect your credit, making it increasingly difficult to get finance in the future. It’s a good idea to take the time to order and look through your credit report before you apply, as you can then see whether you are likely to be seen as creditworthy by lenders.

It is also important to ensure that any loans that you do apply for are going to be suited to your needs. You should check the eligibility requirements on any loans you are considering carefully to ensure that you fir the criteria in terms of minimum income, age, credit status, and other criteria that may be in place.

It is also important to ensure that you compare a range of different loans in order to boost your chances of success, and this is something that you can do with speed and ease online. By comparing different loans and lenders you will be able to see which ones offer loans that are suited to your needs and which can offer the best value for money on borrowing.

Also, before you start applying for a loan work out what you want from your loan in terms of whether you want a secured or unsecured loan depending on whether you are a homeowner, how much you need to borrowing, what sort of repayment term you are looking for, and what to sort of repayments you can afford on a monthly basis. You can then focus on lenders and loans that are going to be suited to your needs rather than making random applications for loans that may not be suited to you.

Tags: credit history, finance, Christmas, Personal finance, Unsecured loan

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Payment shock for borrowers if interest rates rise

Saturday, October 16th, 2010

Officials have expressed concern that many homeowners in the UK could be left facing financial hardship if the base interest rate increases, and some have suggested that those that are in danger of facing higher repayments may want to do some forward thinking and look into safeguarding themselves against higher repayments.

Industry experts have said that interest rates in the UK could start increasing as early as next spring, and for those that are on variable rate mortgages and have been enjoying the rock bottom interest rates there could be a sudden payment shock as they find that their monthly repayments suddenly soar. One official said that homeowners needed to brace themselves for the possibility of an increase of possibly 2 percent over the next year or two.

One expert said that it was worth homeowners on variable rate mortgages considering the low rates of interest now available on fixed loans, and safeguarding themselves by switching to a low rate fixed mortgage for a few years. This would then protect them from unexpected repayment increases if the base rate was to increase over the next year or two, as their rate and repayment would then be fixed for the specified duration such as two or three years.

Andrew Montlake, a mortgage advisor, said: “As rates have fallen to historical lows people should be taking advantage of some of the attractive fixed rates on offer. While it is nice to be on a low tracker rate, this can change quickly and people have to be sure they can afford not just a 1 per cent rise, but possibly a 2 per cent rise in rates over the next year or two.”

Tags: finance, mortgage, Interest, Fixed rate mortgage, Variable-rate mortgage

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Steps taken to improve loans to businesses

Thursday, October 14th, 2010

An important first step has been taken by the banking industry to improve lending to businesses in the UK according to recent reports. The move comes following mounting pressure from the government, which has expressed concerns over the lack of finance for businesses in the UK, which could ultimately hit the economy hard.

UK banks are now said to have proposed a £1.5 billion fund for investment in small businesses in the UK, and many industry groups and officials have described the proposal as an important first step by the banking industry. A report has been issued to the treasury by the banking industry, and the £1.5 billion business fund is one of the key proposals that has been outlined in the report.

According to reports the money from the fund would be invested in businesses over a number of years, and would buy up to a 10 percent stake in businesses that have an annual turnover of between £10 million and £100 million. Both the Chancellor of the Exchequer, George Osborne, and the Business Secretary, Vince Cable, have welcomed this proposal by the banking industry.

The two made a joint statement about the measure, and said: “We have been absolutely clear that banks need to improve the lending environment for small businesses. It is important that the banks now deliver on these plans.”

The move was also welcomed by the Confederation of British Industry, with officials from the group stating that this was the sort of scheme that they had been calling on for some time. The CBI said that the fund would make a valuable contribution when it came to the financing of businesses. The move comes after accusations that banks have not been providing sufficient funding and credit to businesses since the onset of the financial crisis.

Tags: banks, loans, finance, business

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Shapps wants interest rates to be kept low

Thursday, October 14th, 2010

In a recent speech a member of the Monetary Policy Committee, which votes to set the UK base interest rate, said that he believed the base rate needed to increase from its all time low of just 0.5 percent. Andrew Sentance has voted since June to have the base rate increased, believing that this is the only way to curb spiralling inflation.

However, the UK Housing Minister, Grant Shapps, has stated that it is necessary to keep interest rates low for as long as possible in order to ensure that homes are more affordable and keep the property market buoyant. He was speaking at the conference for the homebuilding industry in London recently, and said that at present people simply couldn’t afford to buy homes and couldn’t get the finance that they needed to do so.

He said that last month interest rates on a 75 percent loan to value mortgage were at a record low of 3.79 percent on average, and he said that this had resulted from measures that the government had taken to try and reduce the public deficit as well as from the base interest rate, which has been at its lowest level in the history of the Bank of England for the past nineteen months.

Shapps said: “It’s really important that we keep interest rates low for as long as possible. The biggest problem at the moment is that people can’t afford to buy your product because they can’t get the lending to get it.” He added: ” We need a housing market that is best described as boring,” he said. “We can’t go on thinking that your home is your investment, your retirement plan, and your roof over your head. We have to live in a country where housing becomes over a long period of time more affordable, and that means steadier house prices without boom or bust.”

Tags: finance, interest rate, Grant Shapps, Interest

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Mums return to work to help with debts

Thursday, October 14th, 2010

According to a recent report a rising number if stay at home mums are returning to work by taking on part time jobs in order to assist in paying off debts. Figures were released by the Office for National Statistics recently, which showed that there had been a drop in the number of full time stay at home mothers, which indicates that more and more mums are taking on jobs in order to help with finances and debt repayment in the home.

The number of full time mums is said to have dropped to 2.07 million, and this is said to be the lowest level since records began back in 1994. Officials believe that part of the reason for many mums returning to work is that many breadwinners, which usually indicates their spouses, have lost work or hours in the last year as a result of the recession, making it difficult for some households to make ends meet financially without further work being taken on.

In a recent survey the main reason that mums gave for returning to work was financial restrictions, with many stating that they had felt that they had to return to work in order to pay debts and in particular to help with mortgage repayments. The survey was carried out by price comparison website uswitch.com, and the results show that more than 50 percent of mums that had returned to work despite having a child under the age of three said that they did so in order to help with debt and mortgage repayments.

One mum who has a child aged just two said: “Whilst I would have loved to have stayed at home for a while longer with my daughter it’s been tough over the past few months because my partner had his hours cut a few months ago. It’s put real pressure on us financially, so there wasn’t really much choice other than for me to go back to work.”

Tags: debt, credit, mums, mortgage

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Base rate stays on hold

Thursday, October 7th, 2010

Homeowners will be pleased to hear that the Bank of England and the Monetary Policy Committee have decided to keep the base interest rate on hold at its all time low for yet another month. This will mark the nineteenth month in a row that the base interest rate has been at its lowest level in the history of the Bank of England, which is 0.5 percent.

For homeowners who are on variable rate mortgage this will help to ensure that they can continue making lower repayments, thus avoiding the risk of being unable to afford their mortgage repayments. The move will also be welcomed by many industry groups, who are keen to see the base rate remain at its record low for the foreseeable future.

The decision to keep the base rate on hold has not come as any great surprise to most industry officials, as most had not expected the MPC to put the base rate up because of the continued fragility of the UK economy. This is despite the fact that one MPC member has voted to increase the base rate for the past four months in order to try and keep a lid on rising inflation.

At present inflation stands at 3.1 percent, which is far higher than the 2 percent target set by the government. However, the Bank of England believes that at present it is more important to stimulate spending and ensure the security of the economy by keeping interest rates low than increasing the base rate and focussing on inflation, which it believes will start to come down in due course.

The central bank also announced that there would be no extension of the quantitative easing scheme that was launched by the former Labour government, and through which £200 billion has already been ploughed into the economy.

Tags: Monetary policy, bank of england, interest rate, finance

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Parents dip into children’s savings to avoid debt

Thursday, October 7th, 2010

It has been reported that some parents are finding themselves having to dip into their kids’ savings in order to help them to avoid further debt problems. Many parents have been putting money aside for their kids over a period of years, hoping to save money to help their kids with their education, buying a home, or for other purposes in the future.

However, the tight credit conditions, difficult financial climate, and the recent cutbacks made by the government have impacted not only on parents’ ability to save for their kids but also on their ability to avoid spiralling debt in order to continue buying what they need for the kids and other household essentials.

It has been reported recently that some parents are now having to dip into the money that they originally put aside for their children in order to avoid getting into further debt that they may then struggle to repay. The government has announced a range of cutbacks, including welfare cuts, Child Trust Fund cuts, and more, all of which could have a negative impact on family finances.

Officials believe that with the government cutbacks, combined with the continued difficult financial climate and possible further job cuts, parents will now find it difficult to save for the future of their kids, and could find it difficult to avoid accruing debt or further debt in order to make ends meet financially.

The survey that was recently carried out showed that around 34 percent of parents had already been forced to dip into their children’s savings, and 10 percent said that they did this on a regular basis. Nearly 55 percent said that they wanted to have savings put aside for their kids to help them with university fees so that their kids could avoid getting into debt themselves.

Tags: debt, savings, parents, children

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Avoid getting into debt this Christmas

Thursday, October 7th, 2010

At the start of every year many people are hit with the sudden realisation that they have accrued a huge amount of debt over the festive season, and many go into panic mode because they have no idea how they are going to repay the money. Some even end up spending the rest of the year paying it off, or even add to the debt the following year because they still haven’t cleared what they accrued from the previous Christmas.

Whilst Christmas is still several months away it is important for those that want to avoid huge amounts of debt once the festive season is over to do some forward thinking about the amount that they are going to spend and how they are going to fund their purchases.

It is vital to ensure that you set a realistic budget for Christmas in the same way as you might if you were going on holiday. Making a list of all of the gifts you need to buy and making a note of the maximum amount you can afford to spend on each person is an effective way to stay within budget as long as you stick to this. It is also advisable to set a budget with regards to how much you can afford to spend on going out and entertainment, and ensure that you stick to this.

Another useful way to cut the cost of Christmas is to think about gifts that you may have received over the course of the year or last year from others, which may be lying around the house gathering dust. If they are still in their packaging and look like new then there is no reason why you shouldn’t re-gift them to others this Christmas. That way you get to de-clutter the house, you save the money of buying a gift for that person, but the person still gets a gift.

Many retailers start selling Christmas gifts and products around this time, and in order to generate interest often sell them at half price or less to start with. This is a good time to start buying your gifts, and try and buy one or two a week or a month until Christmas. This will help you to save money and will ensure that you are not caught up in the last minute rush, which is when things are also often at their most expensive.

Tags: spending, Christmas, gifts, debt

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