Archive for the ‘Debt News’ Category
Friday, December 24th, 2010
Many people these days are struggling with a range of debts that they have accrued, and in the current financial climate coping with these debts has become more and more difficult for many people. However, many people that are worried about losing their jobs or about the ongoing challenges and difficulties in the financial markets may be trying to put money aside into savings even though they also have high interest debts.
Some industry officials have said that some people may find that they are far better off using their money to pay off higher interest debts rather than to put the cash into savings. However, whilst paying down debt is going to be more beneficial to consumers in a number of ways one official said that this would only be suitable for people that had at least some level of personal savings that they could use freely in the event of an emergency.
Many of those that are putting money into savings are getting little to no return on their cash because of the low interest rates that financial institutions are paying on savings accounts now, whereas if they used that same money to pay off high interest debts they could save a fortune in the amount of interest that they pay.
However, at the same time people do need to have some money put aside that they can use in the event that an emergency arises, otherwise if something unexpected occurs they may not be able to get their hands on the cash that they need to deal with it.
An industry official said: “As long as consumers have at least a little bit put aside in savings then any further excess cash may be best used by putting it towards savings in order to save money on interest.”
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Tuesday, December 21st, 2010
Over the past couple of years getting debt advice in the UK has become more and more difficult, as the demand for these services has rocketed because of personal debt levels, the global financial crisis, and the recession. Many people have found themselves in a position where they need to get advice relating to their debts, but getting access to these services and this advice has become a more difficult and long winded process.
It is likely that following the New Year many people will be hoping to sort out not only their existing debt but also new debt that they may have built up over the festive season, and it is likely that debt charities and advisors are going to see a sharp increase in the number of people looking for advice and assistance once January rolls around. For those hoping to get advice this can mean more lengthy delays.
Those that think that they may need help and assistance with their debts next year are therefore advised to seek help early on from one of the various debt charities and debt management agencies that are around. With delays becoming longer all the time as demand for these services continues to increase registering early on for an appointment could make all the difference.
One official said: “With the impact of the government Spending Review, uncertainty over job losses, and the financial hangover of Christmas many people will be seeking financial advice about their debts. Whereas people used to get an appointment in a matter of days this now stretches to a couple of weeks, and if demand continues to increase it could become an even longer wait. It is therefore important to register your interest early on if you want advice in the New Year to help manage your debts.”
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season,
debt relief order,
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Friday, December 17th, 2010
Over the past couple of years many people have experienced huge difficulties when it comes to their personal finances, and a huge number of people have experienced difficulties when it comes to keeping up with their repayments and making their budgets stretch far enough. The financial strains that have impacted on people has resulted in many having to seek financial advice and debt advice to try and get back on track.
However, whilst the past year has been bad for a lot of people things could get increasingly worse next year, despite the fact that the recession is over and interest rates are still at their rock bottom level of just 0.5 percent, which is the lowest that they have ever been in the history of the Bank of England, which spans over three centuries.
A number of factors have been blamed for the possibility of increased financial problems for many households in the UK as the New Year approaches. One of these is the coalition government’s Spending Review, which will see a range of cutbacks that will affect consumers from all walks of life in terms of things such as benefits and jobs.
Impending job losses and rising unemployment is expected as a result of the Spending Review and cutbacks, which will leave many people in a difficult position. There is also a VAT hike that is due from the start of January, with VAT rising by 2.5 percent. This will impact on the cost of purchases for consumers, as will the high level of inflation.
One official said: “It’s likely that a rising number of people will be seeking advice from debt agencies and charities next year as the effects of things like government cuts, VAT hikes, increased petrol and food prices, and rising unemployment start to take effect.”
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Friday, December 3rd, 2010
Industry officials have expressed concern over how the many people in debt in the UK will be affected by increased energy bills, which will have a huge impact on consumer budgets during the cold weather. With temperatures already having plunged to sub-zero temperatures many households are now relying on their electric and gas heating, but many may be putting themselves in danger by being too nervous to use their heating due to costs.
Officials have said that by increasing energy prices by unnecessary levels energy firms are making peoples’ lives a misery. Those that are worried about the amount that it will cost to heat their homes are in danger of making themselves ill by living in temperatures that are too low. However, those that do use their heating could end up with huge bills that will plunge them even further into debt.
A number of reports have slated energy firms for bumping up the cost of energy usage in the run up to the cold weather, despite the fact that they are enjoying huge profits. It is claimed that whilst wholesale energy prices may have increased for providers the level of increase that they have applied to consumers is way higher than the increases that they themselves face.
Energy providers in the meantime have tried to justify the increases in energy prices by saying that although they have come at a bad time they, as providers, are also having to pay more money.
One industry official said: “After a two year lull, household energy prices are about to resume their steady climb upwards again. Unfortunately for consumers, the 8% or £99 reduction seen over the last two years failed miserably to reverse the impact of the 42% or £381 increase seen in 2008. And now, whatever small benefit was seen is about to be wiped back out again.”
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Thursday, December 2nd, 2010
For many credit card holders trying to keep out of the red can be very difficult, but in the past having to make a conscious effort to go out and hit the shops in order to go on a spending spree was the one saving grace of many shopaholics, as it reduced the chances of them spending money that they couldn’t afford because they actually had to go to a fair amount of effort to do it.
However, the increasing popularity and ease of internet shopping could be the undoing of those that cannot resist making purchases despite a potentially dire financial situation. In fact, many officials are concerned that online shopping could lead to a further increase in debt levels for people that may already be struggling with credit card debt.
A report was released recently by Sainsbury’s Finance, and officials from the firm said that consumers’ love of online shopping could mean that in the near future more and more people could end up having to seek help with their credit card debts. This time of year, in particular, can be difficult, as many people go online to get Christmas gifts and then end up spending more than they planned to by making unplanned purchases. This is something that a number of debt management firms are also concerned about according to reports.
Kevin Still, director of Atlantic Financial Management, said: “The Internet offers a very cost effective way of buying essential household expenditure items, but there is sometimes a temptation to use a credit card instead of a debit card because of concerns over purchase protection and sometimes just convenience. This can lead to credit card debts building up if not properly budgeted for.”
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Tuesday, November 30th, 2010
It is not unusual these days for people to be in high levels of debt where they are struggling to meet repayments and they cannot make ends meet financially. There used to be a huge stigma attached to being in high levels of debt, but this is now such a common situation that people are now talking about their debts openly.
The number of possible solutions to help those that are experiencing difficulties in repaying their high levels of debt has also increased, and these days there are a number of options available to those that need help, advice, and assistance in order to get their finances on track and make their debts more manageable.
Debt management plans are one such solution and these plans could prove really helpful for those that have a range of unsecured debts that they are struggling to repay with a number of different creditors. There are a number of debt management companies in operation but you need to make sure that you do not go through a company that charges you for advice and to operate your plan, as otherwise you will end up even worse off financially in the long run.
You will find a number of charities and companies that do not charge a fee for debt management advice and assistance, such as Payplan, and these are the companies that you should go through if you are considering a debt management plan. These companies will go through your income and expenditure and will let you know whether you qualify for a debt management plan and how they can help you.
With a debt management plan your debt management company will work out how much you can afford to pay towards your debts each month, and you will then make this one single payment tom your debt management company each month. The debt management company then distributes the money amongst your creditors, paying them on a pro rata basis depending on the balance of your debt.
A debt management plan has its pros and cons. Obviously the main benefit is that you can cut your repayments dramatically each month, which will enable you to make your finances stretch further and pay your living costs, rent, or mortgage more easily. On the other hand you will be paying your debts for a lot longer than you normally would, so you will not be free of debt for a long period of time.
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Tuesday, November 30th, 2010
It has been reported following a recent study that Brits are still prepared to spend money and get into debt despite the fact that many are concerned about the state of the economy, government cutbacks, and the security of their own jobs. Officials have said that many Brits are failing to react to the current climate in terms of adjusting their financial habits.
When it comes to saving, spending, borrowing, and repaying money many Brits have not made any changes to their finances, and are continuing as they were prior to the global financial crisis and the recession. The study was carried out by High Street banking giant HSBC, and officials said that consumers were worried about the current climate but were not making financial changes to reflect this.
The study found that a massive 76 percent of consumers were concerned about the direction in which the UK’s economy was heading, and the same number of people were concerned about their own financial situations and prospects. However, 68 percent of people had not made any changes to their finances and how they handled their money.
In fact the survey also showed that although around 19 percent of consumers had cut their spending because of the economic climate a further 15 percent had actually increased their spending. Around 26 percent of people were willing to borrow money just as much as they had been before the global financial crisis. A further 5 percent were prepared to go into even more debt.
An official from HSBC responded to the findings from the survey, stating: “This suggests people either have their heads in the sand and do not realise the need to change, or that they have simply decide to stoically ride out the recession by refusing to alter their ways.”
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consumers,
recession,
UK,
Banking,
giant
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Monday, November 29th, 2010
Every year many of us have every intention of saving money to pay for Christmas gifts so that we don’t have to use credit cards, take out loans, or rely on overdrafts to make our purchases for the festive season. However, for one reason or another we end up failing miserably to save the money that we need, and before we know it we have run up a huge bill on our credit card or taken out a loan that we cannot afford, leaving us paying off the debt for the rest of the year.
One of the reasons many of us end up in this situation is because we do not prepare ourselves for the festive season even though we know that it is going to end up costing us lots of money. There are a number of ways in which you can eliminate the problem of Christmas suddenly coming around and finding that you cannot afford gifts without getting into huge amounts of debt.
One way in which you can do this is simply by being sensible with your finances for the rest of the year. You know that Christmas is going to be coming around at the end of the year, so look at your budget and see how much you can afford to put side in a separate account each month towards the cost of the coming Christmas. If you start in January and put aside just £50 a month you will have £600 by December, which will pay a very good portion if not all of your Christmas present bill.
You can also look at the various Christmas clubs that are around, into which you can pay money each month, and when Christmas comes around you can choose from a wide range of gifts and vouchers to give as gifts. Again, this can take the hassle out of worrying about where the money is going to come from for Christmas presents when the festive season comes around.
Another way in which you can save money on the cost of Christmas is to buy your presents in January ready for the coming December. After Christmas the cost of some fabulous gifts sets and ideal presents is slashed by 50 percent or even 75 percent, which means that you can buy all your gifts for the following year for a fraction of the retail price, and you can be prepared and paid up for Christmas well in advance.
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Monday, November 29th, 2010
The OFT is said to be cracking down on so called rogue debt advisors, and according to reports at least five of the companies that are said to be involved in this face having their operating licences revoked by the Office of Fair Trading. The OFT has been cracking down on companies that are said to be involved in misleading advertising, hidden costs, and offering poor advice to the many desperate consumers that are anxious to sort their financial problems out.
It is thought that the OFT is also set to crack down on firms that cold call consumers to try and get them to take out a debt management plan or similar financial service, and then sell their details on as leads to debt advice companies. The watchdog is said to be planning a blitz on such firms in the New Year, and plans to come down hard on firms that are seen to be rogue traders in the financial services industry. Debt advice companies that take leads from cold calling firms based abroad will also be at the receiving end of the OFT’s wrath if they are caught out.
According to reports there are eight hundred firms in the UK that have licences to offer debt advice, and earlier this year the OFT wrote to 129 of them to express concern over their working practices. In 50 percent of these cases the problems outlined by the OFT were said to be minor ones. However, in a small percentage of the cases the issues outlined were said to be extremely serious.
Some of the problems that have been highlighted include failure of companies to review customer files, employment of untrained advisors who cannot offer sound advice and information, and advising customers that a service is free when it is not.
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Wednesday, November 17th, 2010
It has been revealed in a recent report that a rising number of people that are struggling with their finances and finding it difficult to cope with debt are turning to the Internet to get advice. Personal debt has become a huge problem over recent years, and there are now a number of debt advice charities and groups that consumers in debt can go to for advice and assistance.
However, the rising number of people with debt worries has seen demand for these services rocket, and the waiting times have become increasingly longer for those that need help. However, for those with access to the internet invaluable advice is often at their fingertips, and more people now seem to be realising that they can find the answer to their problems on the Internet.
A recent survey has suggested that the Internet has become the most popular source of information for those that have personal debt problems. The survey was carried out and released by Trust-Deed.co.uk, and suggests that many people go online to learn more about solutions to their debt problems.
The survey results said that 42 percent of respondents said that they had first heard of trusts deeds via the Internet, with 22 percent stating that they had been told about these solutions from a debt advisor, and 19 percent hearing about them from friends or family. Just 10 percent had heard about them from media sources such as radio, television, and print.
One debt expert said: “People with a debt problem are often embarrassed and afraid. The internet allows them to get access to information and support while remaining anonymous. People can research their options on the web and get advice through debt forums without actually have to admit to anyone that they have a debt problem. This is a very important first step.”
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Thursday, November 11th, 2010
It was recently reported that there had been a drop in insolvency levels in the UK, with levels dropping again following the record level of insolvencies that was seen last year. However, whilst the news will have been welcomed in many industry sectors there are concerns that it could just be a temporary reprieve, and that the situation could quickly get out of control again.
One UK debt charity has stated that personal debt levels in the UK are set to increase, and whilst the recent figures have shown a drop in insolvency levels this is a situation that could go into reverse as a result of rising unemployment. Officials from the Debt Advice Foundation have said that it is likely that personal debt levels and insolvency numbers will rise again as more and more people in the public sector start losing their jobs.
The prediction follows recent announcements from the coalition government with regards to the security of jobs within the public sector. As part of the cutbacks planned by the government it is thought that around half a million people in the public sector will lose their jobs by 2014. The debt charity described the recent insolvency figures as ‘the calm before the storm’ and said that the government’s Spending Review could see the number of insolvencies soar by 20 percent.
David Rodger from the Debt Advice Foundation said: “Although 2010 has seen a reduction in the number of people becoming insolvent, the prospect of half a million public sector jobs being cut with little hope of the private sector picking up the slack, unfortunately means that the worst could be yet to come.” He added: “Although insolvency volumes are the product of a number of contributory factors, unemployment, particularly new unemployment, is a key determinant. If the predicted spending cuts go ahead we could see insolvencies rise to in excess of 40,000 per quarter, which is 20% higher than present levels.”
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Saturday, November 6th, 2010
Most people hate the uncertainty that they feel about their futures, and there are many things that we simply cannot take for granted, such as our health, our relationships, and our jobs. Uncertainty about the latter has been particularly affected in the last few years due to the financial climate, and many people would seriously struggle if they were unable to work due to sickness, injury, or redundancy.
When you think about how much you rely on your income to pay bills, settle debts, put food on the table, and put a roof over your head, you realise just how difficult things would be if you suddenly lost that income. Every year many people find themselves suddenly unable to work due to sickness, injury, or redundancy, and the loss of that income can cause serious problems.
In today’s climate in particular losing an income can be very difficult because not only do people have bills and mortgage or rent to deal with but also debts that they might have accrued over recent years. This would put those losing their income in a particularly difficult position, as it means that they would not be able to deal with their debts as well as not being able to deal with their living costs.
One thing that workers can do protect themselves and ensure that they can continue to meet their financial commitments and pay their living costs is to take out income protection insurance, and this is available from a number of providers. With income protection cover you can protect yourself against losing your income through sickness, injury, or redundancy, and for a specified period you will continue to receive the sum of money that you have covered yourself for if you lose your job or you are unable to work.
You will generally find that with income protection cover you can cover up to 75 percent of your monthly income, although this does vary from one provider to another. The time over which you can receive benefits will also vary, and choices often include six months, a year, two years, and five years. Again, the choices will vary based on the provider.
The cost of cover will vary based on the provider you go through, the level of cover that you choose, and the period over which you want to receive the benefit if you have to make a claim.
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level,
insurance,
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Saturday, November 6th, 2010
Over the past year the level of personal debt in York, as in many other places, has soared, as a rising number of households struggle with their finances and end up replying on credit to pay for everyday purchases and pay bills. This has resulted in an increase in the number of people that have debt that they are struggling to repay, and many have ended up seeking advice about how to best deal with their debts.
However, concern has now arisen over the possibility of many people struggling to even get advice on how they can try and address their debt issues following news that the debt advice service at the York Citizen’s Advice Bureau faces being axed. Between the start of April and the start of October this year the debt advice service at the York CAB is said to have received enquiries for help from 2876 people, and this compared to 2027 people looking for help during the same period a year earlier.
Over the six month period the total amount of debt that was addressed by the York CAB came to more than £10 million. The waiting time for people to get the advice and help that they need has also increased as a result of the higher demand for debt advice, and has increased to around five weeks, whereas a few years ago it was just ten days. There are now concerns that the decision to cut the service could seriously affect the lives and health of those facing financial difficulty.
One official said: “What the debt team at the CAB has found, and this is backed up psychological research, is that debt is bad for your mental health. One-in-two adults in debt have some form of mental health condition. Whether the debt problem causes the health problem, or the other way round, is often difficult to determine, but we know that as well as helping clients with their debts, we see a marked improvement in their mood, ability to cope and plan for the future.”
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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.”
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Money,
balance,
difficulty,
friend,
half,
Research
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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.
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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.”
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Chancellor of the Exchequer,
Spending Review,
job,
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Consumer Credit Counselling Service,
finance
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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.
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Gift
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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.”
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debt,
mortgage,
mums,
credit
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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.
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parents,
savings,
children
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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.
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Christmas,
spending,
gifts,
debt
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Thursday, September 9th, 2010
The huge public deficit in the UK is causing big headaches for the new coalition government, which blames the former Labour government for the problem and is making huge cutbacks to try and reduce the deficit. However, there is also the matter of spiralling personal debts, which are causing the same headaches for households and consumers that simply cannot cope with their debt levels any longer.
Figures have shown that the number of calls being made to the National Debtline run by the Money Advice Trust has more than doubled in the past year, as consumers struggling with their rising debt levels and sinking income struggle to keep up with repayments. Since 2008 the number of calls being made to the advice line has soared according to officials, with the global financial crisis and the recession both having taken their toll on consumer finances.
The charity has said that unless unemployment growth is halted these debt problems could continue to soar. However, with the coalition government having made huge cutbacks in the public sector, and with this expected to have a serious effect on employment levels in the UK the debt problems being experienced by consumers and households could get worse.
The Money Advice Trust also touched upon the debt problems that are being experienced by elderly homeowners, and suggested that a solution in these cases would be to release equity from their homes in order to settle other debts and reduce outgoings.
An official from MAT said: “There can be no doubt that continuing high levels of unemployment are contributing to the personal debt problems faced by the British public. We have grave concerns that households witnessing a fall in income due to unemployment will start to default on debt repayments, and that we may start to see a sharp rise in personal insolvencies.”
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finance,
debt,
Money Advice Trust,
unemployment
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Thursday, September 9th, 2010
According to a recent report UK households are increasingly struggling with personal debt problems, and many have no solution to help them out of their debt problems. A report has been released by the debt charity, the Consumer Credit Counselling Service, showing that nearly one third of people seeking assistance from the charity have been told that there is no solution to their financial problems.
Over 96,000 clients were counselled by the charity in the first six months of the year, and of these over 30,000 were told that there was no solution to their debt issues. The charity said that in cases such as these consumers needed to earn more but in many cases this simply wasn’t possible.
On average those that could not be helped had outgoings that were around £449 higher than their income. This was for a variety of reasons, such as losing income, having hours shortened at work, or having an extra expense such as a baby.
Debt problems in the UK have been further highlighted in a report from the UK’s Office for National Statistics, which showed that nearly four million households, equating to 20 percent – had no adult in work living in the household. The situation could be worsened as a result of the job cuts expected due to the cutbacks being made in the public sector as part of the emergency budget to cut the public deficit.
The Money Advice Trust said: “We have grave concerns that households witnessing a fall in income due to unemployment will start to default on debt repayments, and that we may start to see a sharp rise in personal insolvencies. Research undertaken by the University of Wales last year found there were 2m ‘iceberg bankruptcies’ in the UK – employed people who could not afford any fall in income without defaulting on debt repayments.”
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Consumer Credit Counselling Service,
credit,
households,
debt
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Wednesday, September 8th, 2010
A financial industry group has stated that the number of people seeking debt advice and relief could soar next year, as more and more people find themselves unable to deal effectively with their debts and financial commitments. A number of factors are likely to lead to an increase in the number of people experiencing difficulties with debt repayments, which could lead to more people needing help.
The prediction has come from a spokesperson for Lovemoney.com, who said that amongst other things rising unemployment over the course of this year could lead to more and more people struggling to pay their debts, and these people could end up needing advice on dealing with their unmanageable debts next year.
According to the head of consumer finance at the firm Ed Bowsher unemployment could soar over the course of this year, and this could make it impossible for many people to keep on top of their debt repayments. He said that options would be limited for those that were affected, and they would have to choose from filing for bankruptcy or opting for other solutions such as debt management or Individual Voluntary Arrangements.
He also said that it was likely that banks would end up writing off a lot of personal debt next year, as a result of the influx of consumers that may find themselves unable to meet repayments on loans, credit cards, and other debts. The huge cutbacks made by the coalition government in the recent emergency election are likely to affect job in the public and private sectors according to officials, and this could leave a huge number of people high and dry when it comes to repaying their debts.
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debt,
unemployment,
Lovemoney.com,
finance
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Thursday, August 26th, 2010
It has been reported that some loan firms have been housing grieving families in the UK for repayment of the debts of their deceased loved ones. According to reports some families are not even being given the chance to sort out the estates of their loved ones before they find themselves being hounded by banks and loan companies.
Accusations have now been made that some banks and loan companies are acting greedily and selfishly by pestering the families of those that have died and who are already struggling to cope financially with their loved ones gone. Officials from the Consumer Credit Counselling Service have said that the number of calls being received in relation to these incidents has increased.
The CCCS said that it was difficult enough for people to cope with the loss of a loved one, but having to deal with their debts and with persistent lenders made the situation even worse for many. The charity said that this particularly affected those who had lost loved ones who were main income earners or whose incomes had been used to cover repayments on the debts.
Problems often arise because some people fail to realise that if they sign a joint loan agreement they are responsible for the repayments in the event that the joint applicant dies. This is something that applies to mortgage loans, loans, rental agreements, and other forms of finance agreements.
One solicitors firm, Silverman Sherliker, said: “It’s not appropriate for creditors to harass bereaved family members as all inquiries relating to a deceased affairs ought to be directed to the executors or personal representatives, who are often a firm of solicitors.”
The CCCS said: “Bereavement is difficult enough, but finding you have to deal with debt makes it that much harder. This is particularly so for those that have lost a partner or spouse whose income was used to maintain the repayments.”
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bereaved,
loan,
debt
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Monday, August 16th, 2010
Although having a credit card is considered convenient and easy by most people it is all too easy to accrue debt on your plastic, and in many cases – especially in the current financial and economic climate – consumers find it difficult to repay the debt. However, those that have a high outstanding balance on their credit cards need to be very careful about how much they are paying off on the balance, as failure to make a big enough repayment could result in the debt lasting for years or even decades, and this is on a relatively modest debt. It is important to remember that by making minimum repayments you will not be making a dent in your outstanding balance but will merely by keeping things on hold, leaving you in financial limbo.
There is another major downside to paying only the minimum repayment on your credit card balance each month aside from the length of time it will take to make the repayments, and this is the amount of interest that you will pay. The longer your debt drags on the more interest you will be paying to the lender, and by sticking to minimum repayments you will end up paying an astonishing amount of interest on a relatively small debt.
Of course, not everyone can afford to make huge repayments on their credit debt especially in the current climate, and this is where it may be worth considering a balance transfer credit card that offers either 0 percent interest on balance transfers or offers a low rate of interest for the life of the transferred balance. This will make it easier for those with credit card debt to repay their debt without having to pay interest, as these cards offer a generous interest free period or a really low rate of interest until the transferred balance in repaid.
For those that feel that they can pay the transferred debt off within a year or so then a 0 percent balance transfer card may be best, and there are some that now offer interest free period of well over a year. However, for those that need to be very careful with their repayments and believe that they need to have a far longer period within which to repay the transferred debt a life of balance transfer card could be the ideal option.
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Credit card,
debt,
Interest,
credit
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Monday, August 16th, 2010
Over the past few years more and more people have found themselves in a situation where they are struggling to keep on top of debt repayments, and for many the situations has become unmanageable. This has stemmed from the global financial crisis and the recession, which has affected the finances of many households across the UK.
For many the only solution has been to try and seek advice from debt specialists and agencies, which has proven very effective for some of those with unmanageable debts. However, it is important for consumers to ensure that they go to a reputable debt charity or agency, as some fraudsters have picked up on the interest in debt advice and are using it to scam people that are desperate and vulnerable.
Officials are now warning consumers in debt to be very careful, and this comes after it was revealed that there have been bogus calls in the East Kent area from people claiming to be from the Citizen’s Advice Bureau. Officials have warned that the callers have strong Asian accents, but because they know people’s names when they call they are more likely to take people in. There are now concerns that those desperate to rid themselves of their debt problems will be easily taken in by the fraudsters, and could end up giving out personal and sensitive details to them.
An official from Trading Standards said: “The advice is to be wary of anyone cold-calling and never to disclose any personal or bank details to them. If in any doubt at all, end the call by hanging up. If required, there is free confidential and independent advice on how to deal with debt problems on the National Debt Line on 0808 808 4000.”
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debt,
Citizen’s Advice Bureau,
scam
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Sunday, August 1st, 2010
Many people have found themselves knee deep in debt over recent years, and this results partly from the global financial crisis and the recession, both of which have had a huge negative impact on the finances of many households. For many the financial problems that have hit them over the past couple of years have resulted in huge levels of debt, with many people having accrued debt such as credit cards, overdrafts, and loans.
Whilst some of those that have accrued these debts may now be finding it a little easier to manage their money and honour their financial commitments due to the end of the recession there are still many others who continue to struggle financially, and who are finding it difficult if not impossible to make payment on their financial commitments.
For many of those that have accrued a lot of debt and are finding it hard to keep up with their debt repayments it is vital to find a solution that will enable them to sort their financial problem out as quickly as possible before matters get worse. There are a number of options open to those that have high debt levels, and one of these is known as the IVA or Individual Voluntary Arrangement.
With an IVA those that have above a specified level of unsecured debt with a number of different lenders could be eligible to make set monthly payments based on their income and outgoings, and after a period of five years the remainder of the debt is written off.
An IVA can be a great solution for those that are struggling to pay their unsecured debts, and can really help to ease the financial burden for those that are truly struggling. However, those considering an IVA should bear in mind that it is considered to be a softer alternative to bankruptcy and therefore should not be taken lightly.
An IVA should not be seen as a means of escaping debt, as the long term effects on your credit file and the various side effects can make life difficult. However, it can prove extremely effective for those that truly cannot make their debt repayments.
This interested in opting for an IVA can contact one of a number of debt charities or advice groups, who will be able to go through the criteria and can quickly determine eligibility for an IVA.
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iva,
individual voluntary arrangement,
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Saturday, July 31st, 2010
It has been reported that the level of council tax in Wales is on the increase, as consumers struggle to keep on top of their financial commitments following a very turbulent couple of years. Whilst the recession is officially over many people are still struggling with their money, and this is affecting their ability to pay bills.
Whilst some councils in Wales were owed hundreds of thousands of pounds in unpaid council tax last year there were others, such as Monmouthshire, that were owed over two million pounds in unpaid council tax for the year. Many councils across Wales saw a sharp increase in the amount of unpaid council tax owed to them.
Across the Gwent area councils were collectively owed nearly £7 million in unpaid council tax, and this sort of debt has seriously affected the ability of these local authorities to effectively provide the services for which council tax is paid. This means that those who are paying their council tax regularly may be made to suffer as a result of those that do not pay.
Council officials have said that officers are looking at different ways in which to improve on collecting council tax from consumers, but with job losses still set to affect consumers and with many struggling to pay other bills and debts there is uncertainty over how successful local authorities will be in terms of collecting unpaid council tax from those that have fallen behind with their tax or have simply stopped paying.
The Tax Payers Alliance said: “Council tax has skyrocketed in recent years, and a large chunk of the money that’s owed will simply reflect people’s inability to pay, and in other cases it will be wilful breaking of the law. Councils must do more to recover the money and ensure that law-abiding taxpayers do not have to pay more to make up for those who don’t pay.”
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Council Tax,
debt,
Tax,
Wales
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Saturday, July 10th, 2010
An expert in the financial industry has recently spoken out about personal insolvency in the UK, stating that it is wrong for this course of action to be stigmatised in the way that it often is. Ed Bowsher from Lovemoney.com said that for many people personal insolvency was the only option.
Over the past few years a rising number of consumers have been hit with financial problems as a result of the global financial crisis and the recession, which has led to a restriction in funds and credit as well as many job losses. As a result of this many have had to take on more debt in order to fund even basic living costs in some cases.
However, whilst there are a number of solutions available for those that do have debts that they are struggling to repay some of these solutions – namely personal insolvency – comes with a huge stigma attached. With so much stigma attached to personal insolvency many of those that may have considered looking into this measure may end up being too scared or embarrassed to do so.
Bowsher said that it was wrong of people to stigmatise personal insolvency because for some people it really was the only effective option that was available, but as a result of the stigma consumers were failing to help their own financial situations by opting for personal insolvency.
Since last year the number of personal insolvencies in the UK are said to have increased by around 18 percent, and his indicates that more and more people are realising that this is the best course of action for them. However, officials have warned that personal insolvency is not something that should be entered into lightly as it can have a profound effect on a consumer’s financial future.
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Stigma,
debt,
insolvency,
personal
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Wednesday, July 7th, 2010
According to recently released figures many OAPs are paying off their debts through the use of cash from their equity. The data comes from Age UK, with officials from the company stating that more than one third of pensioners who have unlocked equity in their homes have used the money in order to pay off some of their debts.
The research was carried out for Age UK by the University of Birmingham. It found that around 35 percent of pensioners who had unlocked money from their homes through equity release had used the money to clear some or all of their other debts, and around 50 percent used the cash from their equity to pay for essential repairs. The research found that 36 percent of those releasing equity from their home had used the money for a holiday.
The research found that those that were releasing equity from their homes could be divided into three distinct groups. One group, which was the group that was financially better off, often used the money to make an early bequest or a large one off purchase. The second group tended to use the money to improve their standard of living. The final group, which the group that was worse off financially, used the money to repay their debts.
The data also found that two thirds of people that were aged over sixty five were people that had no mortgage with low or modest incomes. Many were also struggling when it came to maintaining their homes. Over the past couple of years, with the difficult financial climate and recession to deal with, many more OAPs have had to consider the option of equity release in order to manage financially. Many are also struggling on their current pensions.
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equity,
debt,
pensioners,
equity release,
finance
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Saturday, June 26th, 2010
Consumers in the UK have been warned by a debt management and advice group about getting into debt as a result of the number of credit cards in the UK increasing. Figures have shown that there has been a sharp increase in the number of 0 percent purchase credit cards available, and there are concerns that this could lead to more people getting into debt.
Officials believe that the more relaxed lending criteria by lenders could also contribute to more people getting credit cards and then finding themselves in unmanageable levels of debt. This time last year there were only two credit cards that were offering 0 percent interest of more than ten months on purchases, but this has now increased to eleven such cards.
Whilst eleven may not sound like a huge number it does reflect an increase of around four hundred and fifty percent compared to last year, and with rules relating to lending becoming more relaxed there are concerns that more people could find themselves getting into credit card debt.
Officials believe that competition has returned to the credit card market, and once again lenders are vying for business from consumers, although not to the same level as they were several years ago before the financial meltdown. This could lead to more people applying for these cards, and eventually could lead to greater levels of debt of people are then unable to meet repayments.
However, whilst the debt company was concerned about debt levels officials from the firm also said that these 0 percent interest purchase credit cards could be useful if used properly.
The debt company stated: “If used properly, the 0% purchase deals for extended months is still a viable option for many consumers. However, it is important to stay within your limits and pay off the difference by the final month, otherwise you could be in for an unpleasant surprise in the form of increased interest rates.”
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finance,
debt,
Credit card,
credit
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Friday, June 25th, 2010
Recent reports have suggested that debt worries may be increasing for private tenants in the UK, with reports of large increases in the number of private tenants seeking advice with regards to their debts. The data comes from the Consumer Credit Counselling Service, which claims that the level of enquiries regarding personal debt has increased.
The CCCS said that the number of debt related enquiries from those that are privately renting as well as those in social and council rented properties has been rising as a result of many of these renters being unable to keep on top of their repayments. The charity said that previously many enquiries had been from people that were homeowners and worried about losing their homes, but now this had switched to many of the enquiries being from those that were renting.
The CCCS is now concerned that there could be an increase in homelessness as a result of renters struggling with their finances. Those that fall behind on their rent as a result of their financial situations could quickly find themselves being evicted. The CCCS is urging renters to ensure that they always make payments on their rent before they worry about non-priority debts.
The charity also said that things could get worse for those that are on housing benefits, as the new coalition government has cut benefits including housing benefits, which could increase the difficulties that are facing many renters.
An official from the Consumer Credit Counselling Service said: “While we have always had more people in rented accommodation calling for help with their debts, they have usually been able to maintain their rent payments. This suggests that the personal finance situation for those in rented accommodation is deteriorating to the extent that they many end up homeless.”
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finance,
debt,
Consumer Credit Counselling Service,
credit
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Monday, June 21st, 2010
Over the past couple of years many households have experienced real financial difficulties stemming from the global financial crisis and the effects of the recession. Whilst the recession may be over and the economy is meant to be picking up there are still many people that are suffering financially, having got themselves into significant levels of debt over a short space of time.
During the recession and the credit crisis many people found themselves struggling to make ends meet financially, and this meant that many were forced to turn to solutions such as using their credit cards and overdrafts to meet day to day costs. This has left a huge number of households now struggling to make repayments on their debts, and with speculation over the base interest rate increasing this could be a very worrying situation for many.
It is vital for those that have debts that they are really struggling to repay to take action sooner rather than later, and the wrong thing to do – which sadly many people find themselves doing – is to bury your head in the sand and hope that the problem goes away. All too often this simply leads to the debt problems getting worse and worse, and getting to a point where the borrower ends up having legal action taken out against them.
In order to avoid this it is important to keep an eye on your finances and make cutbacks wherever possible so that you can ensure that your debt repayments are met. However, if you have gone through your finances with a fine tooth comb and cannot find any other areas where you can cut back it is important that you do not simply sit back and hope for the best. If you are struggling on a regular basis to make your debt payments it is advisable to seek advice as soon as possible.
There are two main courses of action that you can take to try and solve your debt problems. The first is to contact your creditors directly and see whether some arrangement can be made to ease the situation. Most creditors are aware of the problems that borrowers are facing, and may be able to reduce your payments by extending your repayment term. It may be a good idea to go in and see your lender in person, as you can then effectively explain your financial situation and get the problem resolved as quickly as possible.
Another option that is available is to seek advice from a debt advice agency, and there are a number of these available these days. These agencies will be able to look at your financial situation and outgoings and will be able to recommend an appropriate course of action, such as a debt management plan, and IVA, or simply suggesting ways of budgeting more effectively to ease the financial strain.
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debt,
finance,
Debt settlement,
credit
Posted in Debt News, Featured Articles | 1 Comment »
Thursday, June 3rd, 2010
Over recent years the level of personal debt that has been accrued by consumers in the UK has caused a great deal of concern, and for many individuals the debt problems have become increasingly worse as a result of the financial turbulence of the past couple of years. New figures that have been released have shown that personal debt levels in the UK have continued to increase.
The report has been released by the debt charity Credit Action, and the figures on the report have shown that personal debt levels have continued to increase. The twelve month growth to the end of April this year was 0.8 percent, and the total amount of personal debt came in at £1460 billion. In April of this year total lending is said to have increased by £0.4 billion.
In a breakdown of lending figures the Credit Action report showed that secured lending for the month had increased by £0.5 billion whereas consumer credit lending had fallen by £0.1 billion. The average level of debt per household in the UK is close to £9000, and this does not include their mortgage or secured debts. With mortgage debt included the level of debt per household comes in at close to £58,000.
Over the past couple of years many consumers have been in a catch 22 situation where they have been unable to get affordable finance due to restrictions put in place by lenders but at the same time have needed access to finance in order to fund their day to day lives in some cases due to problems caused by the financial crisis and job losses.
For many this resulted in them turning to their overdrafts, credit cards, and even doorstep lenders in order to get the money that they needed for essential purchases and bill payments.
Tags:
Personal finance,
Consumer debt,
debt,
finance
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Thursday, May 27th, 2010
These days many people are dealing with the burden of unsecured debt, with many having to make repayments on loans, credit cards, store cards, catalogues, and other types of unsecured finance. The past couple of years have been financially turbulent for most people, and many have ended up increasing their debt levels and having far more to cope with in terms of their financial commitments.
Whilst the base interest rate is at the rock bottom level of just 0.5 percent at present this is not always reflected in borrowing rates, and for many the interest rates being charged on loans, credit cards, and stores cards is extortionate given that the base rate it at such a low level. At the same time the interest paid on savings is minimal, which means that those putting their money into savings accounts are getting little to no return.
With this in mind it is worth considering whether there is any point in putting money into any form of savings account if you already have debt to pay off. The returns earned on savings will be far outweighed by the interest charged on debts in most cases, and this means that those that have debts would be better off putting any spare money towards repayments of their debts rather than putting it into a savings account where they will receive very little in the way of returns.
Recent reports have shown that many savvy consumers have realised that they could be losing out financially by putting spare money into savings rather than using it to repay debts, and this has seen the number of people that are paying down their debts rather than saving money surge. For many getting rid of high interest debt has become a priority in the current climate, with many wanting to rid themselves of the burden of debt as quickly as possible.
Credit cards in particular have high rates of interest, with the gap between the base interest rate and the interest rate charged on cards becoming increasingly greater. Consumers who have a balance on a high interest credit card would therefore benefit from transferring the balance onto a 0% balance transfer card or using their savings to repay the debt. This way it is possible to avoid the huge interest costs that some providers charged on credit cards.
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debt,
saving,
finance,
Interest,
Personal finance
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Saturday, May 22nd, 2010
There are many people that are in debt these days, and a huge number of them are struggling to keep on top of repayments to the point where they are having to cut back not only on luxuries but on day to day items such as food and household necessities.
The recession and the global credit crisis has resulted in an increase in the number of people that are facing difficulties with repaying their debts, and many borrowers do not know where to turn to get the financial assistance that they need.
There are actually a number of options available to those that have unmanageable debt levels, such as contacting a debt charity for advice or simply streamlining spending and outgoings. Another option is to contact the lenders to see whether the terms of the loans can be negotiated, and this is something that lenders have become increasingly used to over the past couple of years.
If you have debt that you are struggling to repay it is important to take action before you get to the point where you literally do not have the money to make the repayment and subsequently start falling into arrears. If you are already struggling and feel that things could get worse it is advisable to take action as quickly as possible.
In the current financial climate most lenders will be sympathetic with those that have always managed to maintain repayments in the past but have now started to struggle due to their financial circumstances. This is why it is well worth contacting the lenders and explaining your situation to see whether there is anything that they can do to help.
If you have a good credit rating lenders may be able to offer a consolidation loan, where all of your different debts will be rolled into one and you would pay over a set period of time based on the amount that you could comfortably afford to repay each month.
If this is not an option lenders may be able to review the terms of your loan and make changes, such as increasing the length of the loan period so that you repay over a longer period of time but you are paying less money each month. You can contact your lender in writing or by phone to discuss your financial problems, but it is always worth making an appointment to go in and explain your financial situation as this will get things moving far more quickly.
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loan,
debt,
lenders
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Thursday, May 20th, 2010
According to recently released figures high debt levels could result in an increasing number of people having to work into their retirement in order to fund their lifestyle and deal with the financial commitments that they are still burdened with. Officials believe that this will lead to a sharp increase in the number of people that are only partly retired, as many may have to continue working part time.
Researchers have said that 20 percent of people aged fifty five and over said that due to their circumstances and financial positions they would have to continue working until they were seventy years of age, and in some cases even longer. This is the future that could be facing older people that still have mortgage and other debts but no proper pension provision or savings.
Officials have said that the retirement dreams of many people have been dashed as a result of the high levels of debt that they have coupled with their lack of savings and pensions. Their financial situations mean that many people will have to continue working part time when they should be looking forward to retiring and spending time with their loved ones.
Many of those polled said that once they reached their sixties they would move from full time work to part time work, but would not be able to retire completely because their financial situation would not allow for complete retirement. One pension consultant, Linda Whitney, said that savings for retirement had become a big problem. She described this as ‘one of the largest socio-economic problems’ facing the Government.
Whitney stated: ‘People need to wake up to the fact that they will have to save more, work longer or live on a lower pension in retirement.’
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debt,
Pension,
retirement,
finance
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Thursday, May 13th, 2010
These days there are many people that are in debt over their heads, and for many of these people repaying the debt is pretty much impossible. In some cases consumers that are unable to meet their financial obligations do not really know the options that are available to them, and some launch straight into the bankruptcy procedure without looking at any alternatives.
However, one industry expert has recently claimed that those with a relatively high level of unsecured debt who cannot make repayments could do far better by considering an IVA, or Individual Voluntary Arrangement, as this could provide a number of benefits over other possible solutions such as bankruptcy or Debt Relief Orders.
The advice came from Pat Boyden, personal insolvency expert at PricewaterhouseCoopers, who said that one of the main reasons why an IVA could prove so beneficial compared to the other options was because this was a plan that provided far more structure for those in debt, enabling them to both improve their own finances over a period of time and return at least some of the money that they owe to creditors.
IVAs are known as a softer alternative to bankruptcy, and should not be entered into lightly or without thought. However, for those that really are struggling with a large amount of unsecured debt with a number of creditors these plans can provide structure and financial relief.
Boyden stated: “A massive 35,682 people entered into personal insolvency in the first three months of 2010, showing that the record number of personal insolvencies reached last year is showing no signs of slowing as the UK economy comes out of recession. The UK consumer continues to struggle with personal debt and will do for some time yet.”
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individual voluntary arrangement,
finance,
debt relief,
Personal finance,
debt,
bankruptcy
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Wednesday, May 12th, 2010
Over the past few years many people that did not have any significant debt have found themselves lumbered with debts such as credit cards, store cards, and loans, having struggled to manage on their income during the last couple of years, which have been financially turbulent.
At the same time many people who were already in debt have found themselves even deeper in debt, having struggled to keep on top of their debt repayments and to keep on top of other financial commitments. This has left many households in a very difficult financial situation, and despite the fact that the recession is now officially over things are not set to improve any time soon.
In a recent report a financial industry expert, Chris Tapp from Credit Action, has stated that personal debt levels in the UK are set to remain high for the foreseeable future, as many people are still struggling with their finances and therefore do not have the resources to tackle their debts and make repayments on the money that they owe.
Although the credit crunch has resulted in a tightening of lending criteria amongst banks and other lenders, which means consumers are less likely to get finance and accrue debt, many are struggling to pay existing debts because of factors such as reduced working hours and job losses.
Mr Tapp also added that the increase that has been seen in unemployment levels could make debt problems worse, as consumers turn to sources of alternative funding such as credit cards and overdrafts in order to make ends meet.
Tapp stated: “I think we will still continue to see personal insolvencies very high for some time until employment begins to filter back into the system and more people can get back into jobs.”
Tags:
credit,
finance,
repayment,
debt
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Monday, May 10th, 2010
A recent report has indicated that consumers in the UK have become increasingly cautious about borrowing money and getting into debt that they cannot afford to repay. However, despite this trend insolvency levels have continued to soar as a result of people finding themselves in unexpected situations.
The report claims that whilst fewer people are putting themselves at risk of taking on loans and debts that they cannot afford there are also many people that took on debt that they believed that they could afford only to find that something unexpected happened that affected their ability to make repayments.
The data was released by the debt charity Money Advice Trust. An official from the charity said that in many cases consumers had taken out loans and credit when they thought that they could afford to make repayments on them but then something like a death, job loss, or divorce had seriously impacted on their ability to repay the debt.
The charity also said that there had been a sharp rise in the number of people that were contacting advisors as a result of changing situations leaving them in a position where they were struggling to make repayments on their debts. The number of personal insolvencies is said to have increased by 0.9 percent in March compared to the previous month.
The Money Advice Trust said that it believed that consumers’ attitudes to taking out debt had changed, as they were more cautious about getting themselves into debt and having to struggle, particularly given the financial turbulence seen over the past couple of years.
The charity said: “We think the general attitude to debt has changed. People are now more cautious about borrowing and spending and think through the consequences of getting themselves in debt.”
Tags:
Debt settlement,
finance,
debt,
Money Advice Trust
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Monday, April 26th, 2010
Over recent weeks the main political parties that are fighting to lead the country as the next government have been highlighting what they believe to be the highlights of their manifestos, and have been showing their potential voters what they can do to help both the nation and the residents and businesses that live within the UK.
Whilst a number of different areas have been highlighted and discussed by the political parties there are a number of things that many people were disappointed to see were not really mentioned in the manifesto, or were only briefly touched upon.
One campaign group has stated recently that all of the different political parties need to put more effort into focussing on debt levels amongst consumers in the UK. The group, ClearDebt, has stated that the number of people that are harbouring debts in the UK has risen, although the average amount owed per person has fallen.
The data showed that between October of 2009 and March of this year the number of people with personal debt worries had increased by 13 percent compared to the same period the previous year. However, the campaign group also believes that whilst the number of people in debt may be on the increase the level of awareness amongst consumers has increased and this has led to people seeking advice more quickly.
Officials from ClearDebt stated: “The number of people asking us for debt help has increased by 13% between the two periods (October 09 – March 10 in comparison to the same period in 2008/09). What we are seeing is more people than ever before seeking help but with lesser debts. For me, Britain’s personal debt issues are getting more worrying, not less.”
Tags:
ClearDebt,
debt,
finance,
Consumer debt
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Friday, April 23rd, 2010
The number of people struggling to repay their debts and mortgages could increase in the UK after it was revealed that the unemployment rate has increased to its highest level since 1994. The jobless rate has surged to its highest level since before Labour came into power, and the threat of further job losses is still high.
Over the past couple of years the financial crisis and recession has seen many people suffering financially, with many accruing high levels of debt and many others unable to cope with the debt that they already had. During the three months to February the unemployment rate increased by 43,000, and this could further impact on the abilities of tens of thousands of people to make debt repayments.
The data was released by the Office for National Statistics. The figure also showed that whilst the unemployment rate had increased the number of people claiming unemployment benefit fell dramatically in March, showing a higher than expected fall of 32,900.
Youth unemployment has been increasing according to the figures, and in the December to February period there were 929,000 people aged between sixteen and twenty four out of work. There was also an increase in economically inactive people, which are those that are out of work and not actively seeking work. Yvette Cooper, the Work and Pension Secretary, commented on the figures.
Cooper stated: “What this shows is that we are not out of the woods yet. That’s why it is so important that we keep increasing the support for the unemployed, but also that we sustain the overall support for the economy.”
The jobless figure has given the Tory party more fuel to verbally attack the Labour government, with the shadow Work and Pension Secretary stating that Labour policies were clearly not working.
Tags:
debt,
unemployment,
government,
figures
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Thursday, April 22nd, 2010
A recent report has suggested that there are now many people in the UK who are hiding their debt problems, with many of them struggling to make ends meet financially and hiding their debt issues from their families and loved ones. It is thought that around one in three people could be hiding problems relating to their debt levels and struggling as a result of their debts.
According to the report the value of this so called hidden debt mountain could be an astonishing £55 billion, adding to the already huge level of personal debt that consumers in the UK have overall. The average personal debt in the UK is now said to be just under £10,000.
Industry officials are now concerned how people with hidden debt will cope in this turbulent financial climate. Whilst the recession is over many people are still struggling financially, and the threat of job losses is still very real. For those that do have huge secret debts there is nobody close to turn to if things get unmanageable and this could create further problems for these people.
Those that do have high levels of debt that they cannot manage are being advised to seek advice from a debt charity or group, where they may be able to learn about alternative options that are available to them or get advice on better managing their finances and their debts.
One borrower who has a massive £36,000 of personal debt said: “None of my family know about the debt that I am in. A couple of years ago things got really tough so I had to go into a debt management plan, and my family still don’t know about my debt. I will be paying on the plan for about twenty years before I clear my debts. That’s a long time to keep a secret.”
Tags:
debt,
credit,
secret,
finance
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Saturday, April 17th, 2010
It was recently reported that over the past few weeks Brits have been whipping their credit cards back out and hitting the High Street and Internet shopping sites with a renewed confidence. Whilst the recession is not long over and the effects of the global financial crisis are still affecting the nation consumers seem determined to spend their way out of the financial gloom.
However, whilst this increased spending may prove to be good news for the retail sector, which has suffered massively over the past year, it could also lead to consumers burdening themselves with debts that they will struggle to make repayments on. Some consumers are already burdened with debt, and additional debt could tip them over the financial edge.
There are now concerns that increased spending by consumers in the UK could lead to more and more people finding that they can no longer cope with their debts or make repayments on the amount that they owe. Officials believe that this could lead to an increase in the number of people applying for an IVA, or an Individual Voluntary Arrangement, which is a softer form of bankruptcy.
An IVA can have a profound effect on the credit rating and the financial future of the borrower, and should only be used as a last resort by those that are experiencing financial difficulties. However, the more people borrow the more they are likely to be desperate to escape their debt, and for some this may seem like the easy way out, as many fail to recognise the long term repercussions.
Of course, this doesn’t mean that those that have genuine problems with their debts and who are seriously struggling to make repayments do not have some form of help at hand. In actual fact there are many alternatives that consumers could look at which would not have as profound an effect on their financial future as an IVA or bankruptcy.
One potential solution is to contact creditors directly in writing or person, explain the financial situation, and look at making a reasonable repayment offer over an extended term – most lenders will consider this especially in the current climate.
Another option is to go to a debt management agency, preferably a charity run or government run one that does not charge fees. You may then be able to get advice to help you to manage your finances more effectively or may be able to get onto a debt management plan.
Tags:
credit,
finance,
debt,
individual voluntary arrangement
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Saturday, April 17th, 2010
A recently released report claims that the number of divorces filed in the UK has been plummeting over the past couple of years. However, whilst this could indicate that couples are enjoying stronger relationships officials believe that the falling divorce rate is more about finances than about a loving relationship.
According to the report many couples that may wish to get divorced now have so much debt that they are forced to continue living with one another in order to be able to maintain repayments on their debts. The divorce rate has hit its lowest levels since the 1970s over the past couple of years, but this does not necessarily indicate happier marriages.
Whilst one of the major factors attributed to the drop in the divorce rate is couples being forced to live and remain together due to their debt levels there are also other financial factors that are thought to have played a part. Officials believe that due to the financial climate over recent years, fewer couples have been able to afford to get married in the first place, which means that there are fewer couples to get divorced.
In addition to this the recession and financial strains on couples means that some may not have had the financial means to get divorced, particularly in cases where there are children and assets involved and where the services of a solicitor may be required, as this can work out to be very costly. One official from Atlantic Financial Management said that without selling the house it could be difficult for couples to separate.
He said: “In addition to removing one or other party from the deeds on a property, the task of splitting responsibility for joint household debts can be very traumatic. Clearing credit card debts and other joint loans is generally not possible unless the property is being sold and the assets split.”
Tags:
debt,
Divorce,
Marriage,
finances
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Sunday, March 21st, 2010
Banking giant Barclays recently announced huge profits for the year despite the turbulence in the financial and banking sectors, and also said that it had put £1.5 billion aside for staff bonuses for this year. (more…)
Tags:
Barclays,
overdraft,
Bank charge
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Saturday, March 6th, 2010
Recently released figures have shown that in the final three months of last the number of properties in the UK falling into repossession fell significantly, as did the levels of mortgage arrears in the UK. (more…)
Tags:
mortgage,
repossession,
council of mortgage lenders
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Thursday, February 25th, 2010
It has been revealed that action being taken by the Ministry of Justice could result in a greater degree of protection for homeowners that could otherwise be at risk of losing their homes because of their inability to make repayments on personal debts such as credit cards. (more…)
Tags:
credit,
real estate,
debt,
finance,
mortgage
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Wednesday, January 27th, 2010
One financial industry group has recently suggested that consumers could really benefit by taking out a balance transfer credit card and transferring their higher interest credit card debts onto the card. (more…)
Tags:
balance transfer credit cards,
debt
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Sunday, December 27th, 2009
Many consumers are being lulled into a false sense of financial security by credit card lenders that are quite happy to accept very low repayments on the credit card balance, but failing to make clear to the consumer that this will lead to a lifetime of debt for many. (more…)
Tags:
Credit card,
credit card debt,
Credit counseling,
Debt-snowball method,
credit,
loan
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