Archive for July, 2011

Consumers shouldn’t rely on inheritance to clear debt

Saturday, July 30th, 2011

According to a recent report there are many people in the UK who have a lot of debt and who hope that getting some sort of inheritance at some point will help to sort out their debt problems. Many people try and keep things ticking over with regards to their debt payments in the hope that at some point a relation will leave them some money or assets that they can use to clear this debt.

However, officials have warned that those with debts need to stop relying on inheritance and windfalls to try and clear their debts, stating that many could end up being disappointed because they end up getting nothing. In fact, according to a recent survey a large number of people who leave wills actually leave more money to their pets and animals than they do to other people.

A survey was carried out by More Than and revealed that around 40 percent of people leave more money to their pets than they do to other people. The survey showed that 70 percent of people were worried about what would happen to their pets if they were to die and wanted to leave the money to ensure the long term care of their beloved animals so that they did not end up in a rescue centre.

An official from More Than said: “Pet owners are naturally concerned about the long-term care of their pets and many are taking the necessary steps to make sure they are provided for in their wills.”

This means that many of those that may have been expecting money from a relation who passes away could end up with far less than they imagined, which is why people are now being urged not to rely on this sort of income to deal with debt.

Tags: large number, Money, windfalls, long term care, debts, Credit card, Pet owners

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More additional debt taken on by Scots

Monday, July 25th, 2011

It has been revealed in a recent report that people in Scotland have taken on more additional personal debt than people in any other part of the UK. The data comes from the insolvency trade group R3 in its quarterly personal debt report. The data showed that around 13 percent of people in Scotland had taken on more debts including debts from credit cards, loans and overdraft. This compared to 12 percent of people for the whole of the rest of the UK.

According to the report many people in Scotland are also struggling to make their money stretch from one payday to the next. Around 43 percent of Scots are said to be struggling to make their money last until payday. However, whilst this figure is high it was actually around 3 percent less than the rest of the UK.

In the past twelve months around 200,000 Scots have taken out a payday loan whereas for the rest of the UK this figure came to two million. The R3 data showed that one in every five Scots was struggling to repay their payday loans whereas in the rest of the UK this figure fell to one in ten. Officials from Citizen’s Advice Scotland said that they were not surprised by the figures, as evidence has shown that debt has been a huge issue in Scotland for quite some time.

R3 Scottish council member John Hall said: “It is extremely worrying that such a large percentage of people are struggling to make it to payday and that many are using payday loans to bridge the gap. These loans tend to have high interest rates and often those who use this type of credit find themselves in a vicious debt cycle, especially if they then experience a sudden job loss.”

Tags: two million, high interest rates, debt, business, whilst, Citizen

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Payday loans described as legalised robbery

Tuesday, July 19th, 2011

Payday loans have been around for a long time but they seem to have become more popular over recent years. With many people struggling to get finance in the post-credit crunch years, more and more people have become aware of the existence of payday loans, not least because many payday lenders are taking advantage of the difficult financial climate and advertising their services more to what has become a desperate audience.

For many people in the current climate it has become impossible to stretch the income far enough, and a huge number of people are left facing a shortfall in their finances when it comes to meeting all of their financial commitments. For this reason more and more people end up turning to payday loans, which are short term loans that are designed to tide the borrower over until payday comes along.

However, the interest charges on these short term loans can be phenomenal and many people have ended up paying a fortune because they have let the loan rollover into the next month, which results in the fees being applied again. One industry expert said that people had become so desperate for money to tide them over until the end of the month that they had started turning a blind eye to the problems and costs involved in this sort of loan.

He said that the costs of borrowing in this way were potentially horrific but that people were still going ahead and using these loans to get them out of a financial pickle.

He stated: “Typical payday loans charge interest of around 2,000 per cent or more. This is nothing short of legalised robbery.”

The comments came after separate research revealed that a rising number of people were finding that they were running out of cash part way through the month.

Tags: business, robbery, advertising, number, payday, Interest, expert

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People on lower incomes struggling with debt

Monday, July 18th, 2011

It has been revealed in a recent report from a leading debt charity that many people who are on lower incomes are struggling with their debts, with a range of factors having affected their ability to hand existing debt and forcing them to get deeper into debt over the past few years. For many people it has become increasingly difficult to cope with debt repayments due to so many other factors that have affected their finances.

Officials from the Consumer Credit Counselling Service said that people on lower incomes were really struggling with debts now, having become increasingly reliant on things such as credit cards and loans and having found it more and more difficult to cope with the repayment increases. This is due to factors such as the rising bills, soaring inflation and living costs, frozen or cut wages, job losses, and government cutbacks amongst other things.

The CCCS said that people that were earning less than £13500 a year tended to owe around 20 percent more in unsecured debts than they actually earned. This would mean, for instance, someone earning £10,000 a year owing around £12,000 in unsecured debts such as credit cards and loans. This data came from the charity’s recent report, the Debt and Household Incomes report.

One industry official said that things could get worse in the foreseeable future for some people, stating: “Many people who scraped through the recession are going to find the next few years even harder.”

The CCCS stated: “Unfortunately, these figures confirm our fears – that troubled times lie ahead for many people in the UK. This pain is going to spread wider and affect many more people than commentators previously assumed.”

Tags: instance, Financial Planning, debt consolidation, loans, government, repayment, job losses

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