Archive for July, 2010

The human cost of living with debts has been laid bare by new figures.

Debt problems are putting a huge strain on people’s close relationships, their health and their ability to carry out their jobs, according to The Consumer Credit Counselling Service (CCCS).

More than four in five (83%) respondents said their debt problems were having a severe effect on their lives.

More than a third (37%) said debt problems are having a harmful impact on their relationship with their partner and nearly a quarter said relationships with their children had been adversely affected.

The impact debt problems have on relationships may explain why people tend to keep their debt problems a secret.

Only one third of respondents said they share their debt problems with their partner, 20% said their friends and 16% their parents. One in ten respondents said they kept their debt problems a secret, giving reasons such as shame or embarrassment.

Almost half (46%) said debt problems were having a very negative influence on their health, with only 6% saying it had no affect whatsoever.

Some 63% of participants said debt problems are having a negative impact on their ability to do their job, with worries hampering their ability to carry out their duties.

CCCS external affairs director, Delroy Corinaldi, said that while it is old news that debt problems have an adverse effect on people’s lives, he was shocked and saddened at the extent of human suffering uncovered by the survey.

"There is a lot of focus on the economic implications of the personal debt crisis but we are only starting to understand the human cost of debt problems," he added

Another surprising revelation was that only 15% of respondents had debt problems because of overspending, with almost half having fallen into debt problems because of redundancy, a pay freeze or reduced working hours.

"This busts the myth that recklessness with credit is the main cause of debt problems. Rather, it is life itself, over which we often have no control. Such people need sympathetic and practical support to guide them through this crisis so that it won’t scar them and their families for life," said Mr. Corinaldi.

Source: moneyfacts.co.uk

Thelendingwizard.com the online consumer tool to search and apply for personal loans today, reveals that borrowers are still struggling to find loan deals, with the number of products available to new customers falling significantly since October 2008.

The site’s research – which looked at those loans available to new customers compared to those available to customers with an existing relationship with lenders – reveals that a mere 5 out of 26 current high street lenders (19%) has any kind of loan available to new borrowers, namely A&L, Sainsbury’s, Tesco, Co-Op / AA and Zopa.

This represents a significant drop when compared to 23 lenders (88%) in October 2008. Over the same period, the number of relationship-only lenders or those banks only willing to lend to existing customers, has increased from 2 to 12.

Olivier Beau de Lomenie, MD, thelendingwizard.com says:

“It remains a tough climate for those looking for credit at the moment. In order to limit risk many lenders have tended to restrict their new lending to existing customers, as they have the comfort of an intimate knowledge of how these people conduct their financial affairs.

"As a result, new borrowers are severely restricted in where they can go for credit. It is crucial that these individuals are fully aware of the options available to them and research the market thoroughly to ensure they get a loan that is right for them. This is where thelendingwizard.com is extremely valuable as we can give accurate quotes for a wide panel of lenders quickly without negatively impacting a customer’s credit rating.”

Source: myintroducer.com

Responding to figures from the Insolvency Service which show a sharp rise in insolvencies across all regions of England and Wales in 2009, financial solutions provider Think Money has called on struggling borrowers to take action on their debts before the problem gets out of control.

The company reminded borrowers that insolvency can sometimes be avoided by getting advice as soon as debt problems become apparent.

The Insolvency Service’s statistics showed that there were 31.1 personal insolvencies (including IVAs (Individual Voluntary Arrangements) and bankruptcies) per 10,000 of the adult population in 2009.

The North East region fared the worst that year, with 38.1 insolvencies per 10,000 people, while London suffered the least with 19.6 insolvencies per 10,000.

Insolvencies per capita have been on a sharp upwards trend for many years now, with only 2008 showing a slight fall. In 2000, there were just 7.2 insolvencies per 10,000 people across England and Wales – less than a quarter of today’s figure.

A debt expert at Think Money commented:

"We already knew that insolvencies have been rising sharply in recent years, but these figures demonstrate just how quickly the problem has grown, as well as how insolvency levels vary across England and Wales.

"It’s possible that many of these cases – and many in the future – could be avoided simply by getting debt advice before the problem has a chance to get out of control.

"Many people’s reaction when they realise they have a debt problem is to hope their financial situation improves and they often therefore delay getting help – but the best course of action is always to get advice early, even if the problem doesn’t appear to be that serious.

"Of course, not all insolvencies can be avoided, as an unexpected change in circumstances can often be the cause. In those cases, speaking to a debt or insolvency adviser about all appropriate solutions is still important.

"Some people may be better off with bankruptcy, while an informal solution may be more appropriate for others – but it can be hard to decide without the help of an expert."

One of the UK’s leading financial solutions providers, Think Money is based in Salford Quays, Manchester, and employs around 800 employees to deliver a comprehensive range of debt solutions, including IVAs, and a range of loan, insurance and banking solutions.

Think Money defines its mission as ‘To educate, rehabilitate and advise on all aspects of financial management’.

Source: creditman.biz

Sheila is in her late 50s and was brought up never to live on borrowed money.

She and her husband saved for years for the deposit on their first modest house and the couple never owned a credit card, everything from family holidays to Christmas presents was always paid for up front. However, when her own daughter needed a deposit for a small flat, Sheila, who has now been widowed for five years, decided to take out a loan. When her son left university with £5,000 worth of debt, it was Sheila who again helped out.

Until recently, she was just about managing to keep her head above water, but six months ago she was made redundant. Unable to find another job, Sheila is now struggling to keep up with repayments and while she has put her house on the market, as yet there have been no offers. The amount owed is growing each month and Sheila is not alone.

While much has been written about increasing debt among younger generations, unwilling or unable to put money aside for the future, money trouble doesn’t respect age or class.

According to the charity, Consumer Credit Counselling Service, the problem is growing among the over-55s who have been the hardest-hit by recent waves of redundancy. Many have spent the last few years bailing out their children and with pension schemes closing, retirement is no longer the cosy option it once was.

"Debt levels in the under-25 age group are now decreasing, but over the last year or so there has actually been a rise in the number of over-55s who are struggling to cope," says the CCCS’ Tom Maloney. "We often find the older people who come to see us have been borrowing money to help out other members of their family. At the beginning, they can easily manage the repayments, but when they have found themselves out of work or trying to live on a pension worth a lot less than they thought it was, that’s when the situation can begin to spiral.

"We have seen people who have started out borrowing a couple of thousand pounds a year. It perhaps doesn’t sound like much to someone who has a full-time career and a lifetime to sort out their finances, but to those in their 60s and 70s, there isn’t always the option to take on a second job to pay back the money they owe.

"Debt problems are very stressful at any age, but they are particularly hard to deal with at a time in your life when you expected to be more settled financially."

North Yorkshire has been identified as a particular hotspot by the charity, which is now trying to identify the reason behind the increase. What they do know is that the stigma of debt and the

prospect of being declared bankrupt forces many mature debtors to bury their heads in the sand.

"Very often they feel embarrassed and don’t want other relatives to know the mess they have found themselves in," says Leeds-based Tom, who now heads the charity’s new equity release service, which provides free advice to those worried about mounting debts. "There is a real fear of being declared bankrupt and having their neighbours know their business.

"It’s daunting and frightening, but ignoring debts doesn’t make them go away and we do try to encourage the people we see to tell their families. Bankruptcy is very much a last resort. More often than not a reasonable repayment plan can be sorted out and just by checking they

are receiving the right benefits we can increase an individual’s monthly income by an average of £100.

"Being in debt that you can’t pay back puts enormous pressure on individuals and their families. For many, the future still looks increasingly uncertain and for some it can feel like they have reached a dead end with no way.

"However, there is help available. Dealing with debt can be very lonely, but by talking to people trained in negotiating financial minefields there is a way out."

Source: yorkshirepost.co.uk

Debt and the devastation it causes has led the Government to announce a review of consumer credit.

This will cover the way credit is sold and whether people understand the small print.

It will look at problems arising in the lifetime of, say, a personal loan and how these can be avoided.

It will also examine the current insolvency solutions for those with serious debt and, hopefully, address the fact a lot of undischarged bankrupts cannot even get a basic bank account.

Citizens Advice say they are dealing with record numbers of debt problems – 7.1 million between April 2009 and March 2010. Although they can help many people out of debt, for some bankruptcy is the only viable option – and that is why it is vital the Government tackles this issue.

Consumer Affairs Minister Edward Davey says: "I want to be sure that people can get fair deals on credit cards, loans and other products."

Don’t hold your breath, this review will drag on. So be sure you understand any credit agreements signed.

Do sums to be confident you can afford repayments. And seek help immediately if struggling with debt.

Source: mirror.co.uk

With the Government focusing on reducing the nation’s sovereign debt levels, research from Britain’s number one comparison site moneysupermarket.com* has revealed that, with total levels of personal debt standing at over £1,460 billion, some consumers are displaying a worryingly lax attitude to their own personal debt levels.

Sixty per cent of respondents claimed that they wouldn’t worry about their debts, even if they were to lose their jobs. The threat of debt collectors knocking at the door would only cause concern for a third (35 per cent) of Brits, while two in three (66 per cent) said they would not be concerned if they were in too much debt to pay their gas and electricity bills. Worryingly, only 17 per cent would be worried if their friends and family fell out with them over the money they owed them.

Less than half (43 per cent) of those with debt would be concerned if they couldn’t pay their mortgage or rent, meaning 57 per cent of those with debt would not suffer from sleepless nights if they missed a mortgage or rent payment. Those missing two or more loan or credit card repayments seem the least worried, with only 15 per cent saying this would worry them, despite the dire consequences of doing so.

Tim Moss, head of loans and debt at moneysupermarket.com, said: "Many people are being pushed to breaking point by the spiraling cost of living and the ongoing effects of the credit crunch but, as our research shows, people do need to be aware of their own financial circumstances and not bury their heads in the sand. Missing a payment, whether to a credit card, mortgage or utility provider, can mean serious trouble; not only will consumers increase their overall debt levels, but their chances of obtaining the best credit products in the future will be severely reduced.

“The era of debt-financed consumer spending is over, so people will need to take extra time to manage their finances and consider lowering their monthly outgoings. Consumers should ask themselves if they really need a new car, the latest Sky package or those new shoes. Debt consolidation is another way of managing multiple debts, however those people who consolidate their debts need to be extremely disciplined and resist the urge to borrow anything further.

”At a time when there is the high likelihood that we will see a squeeze on public sector jobs, people should be preparing themselves to help cope should the worst happen. Although the majority of people manage to cope with their debts when times are good, a sudden change in circumstances, such as losing your job, can lead to a spiral which is difficult to get out of. One way to reduce the impact is to have at least three months of outgoings in savings which you can call upon if needs be. If you are in financial difficulty, then consider approaching one of the free debt advice charities services such as CCCS or Citizens Advice for help.”

* Opinium Research carried out an online poll of 1,933 British adults from 27th April to 3rd May

2010. Results have been weighted to nationally representative criteria.

* * Source: Credit Action debt statistics July 2010

Source: creditman.biz

The true scale of the national debt is £2trillion – more than twice the official figure, an alarming study shows.

The black hole in the public accounts equates to £78,000 for every household in the country.

The ‘real’ state of the national finances is exposed in a study published today by the Centre for Economics and Business Research, which warns of a series of mammoth debts that aren’t revealed by the official figures.

The national debt – forecast to reach £932million by next spring – does not include a number of expensive liabilities, such as the cost of civil service and town hall pensions and projects funded under the Public Finance Initiative.

Putting these liabilities into the official figure would add £1.13trillion to Britain’s whopping overdraft, according to CEBR.

Under the worrying scenario, the debt would jump from 62 per cent to 138 per cent of Britain’s income.

In its study, CEBR warned that the Government cannot formulate a plan to revive the economy while the liabilities remain hidden.

Charles Davis, an economist at CEBR, said: ‘Clarity and transparency on the public sector finances has never been more vital in the context of recent concerns over public sector debt, particularly in the advanced economies.’

The report, which found that public sector pensions are by far the biggest liability excluded from the official record, will provide ammunition for the Government as it prepares to slash civil service pay and perks.

Unfunded public sector and local government pension liabilities, which the Government will need to pay in the future, amount to a staggering £1.08trillion, according to CEBR.

Also written out of the accounts are the full cost of projects financed through the PFI, which by CEBR’s calculation adds a further £43billion. So-called contingent liabilities, such as Network Rail, add £2billion to the total.

Source: dailymail.co.uk

Personal insolvencies in England seem to be pointing to a divide between the North and the South of England, according to figures last year.  New data released from the Insolvency Service shows that bankruptcies and individual voluntary arrangements (IVA’s) were at the highest rate in the North East of England with the lowest level being in London.

Due to people finding themselves out of work with unmanageable credit card bills, personal insolvency’s are currently at record highs.

The reason that the North East of England has been  hit the hardest is partly due to the fact that it had a higher than average unemployment rate and one of the region’s main source of jobs: the construction industry, was hit dramatically during the recent economic downturn.

These figures that were recently released show the statistic’s for 2009 however if recent data is to believed, then these figures are due to become much worse. The number of people being declared insolvent have been increasing each quarter with that trend expected to continue.

There was a 17.9% increase in personal insolvencies compared with the same period a year earlier.

The advice from the United Kingdom’s debt charities is to get help as soon as they realise they are facing unmanageable monthly payments.

Source: onefaceinamillion.com

Millions of people will be jetting off on their holidays this summer – but the photos and happy memories will be accompanied by mounting debt.

New research shows one in three British people will pay for part or all of their holiday by credit card, travel agent payment plan or borrowed money.

A total of £12bn in debt has been taken out by people not wanting to miss out on their annual summer getaway.

Insurer Bright Grey said the average person will borrow £1,200, with 58% admitting they will not be able to repay it straight away.

But despite this concerning trend, 13% of people said they had to have a holiday every year regardless of whether they could afford it or not.

The same proportion said they needed their friends to see them take an annual trip away.

However, the poll also found that just one in 10 people is planning to take a long-haul trip.

Roger Edwards, proposition director at Bright Grey, said: "Getting away on holiday can be a high point of the year for many people, however, with one in three borrowing to pay for their getaway, it is important to make sure they don’t end up with a financial holiday hangover on their return."

Source: news.sky.com

The recent recession has hit many UK citizens extremely hard, leaving many house owners, car owners and businesses in a desperate struggle for survival and with very little disposable income. Although the end appears to be on the horizon, it has left the country with an astonishing level of debt.

12 months prior to the end of April 2010, UK banks and building societies had written off approximately £9.6bn of loans to individuals and from January- April 2010 £2.6bn has been written off to which £1.25bn was in credit card debt. Even with these levels of debt being written off the UK’s personal debt still stood at £1,460bn at the end of May.

In order to survive many people have had to take out loans from their banks to help them through those difficult times to pay off mortgages, credit cards etc. In May 2010 the total lending figure rose by £1.5bn, secured lending by £1.2bn and the annual growth rate of consumer credit rose by 0.1% to 0.0%. In many cases people have had to cut back their spending and this has led to missed payments of loans and left them with poor credit ratings. This has ultimately affected consumer from being able to gain more credit from a variety of different loans both secured and unsecured.

Throughout Britain’s financial crisis, Creditplus has used its vast experience in the Car Finance industry to continue supplying loans to customers with varying credit ratings. With over 30 lenders to choose from Creditplus has the best chance of securing consumers with car finance, even if they have adverse credit histories.

Creditplus aim to let every customer drive away in the newest vehicle possible which is purchased using car finance. With a team of industry experts Creditplus can tailor deals to suit the customer perfectly with low interest rates and monthly payments. They also source the vehicle for the customer taking the hassle out of buying a car and securing vehicles at trade prices for the customers.

By applying online you will save valuable time and money and you will also benefit from our instant online quote decision, the only true instant decision tool in the industry. You also have the ability to find a car yourself from a dealer or our sales advisors will find you a vehicle to your specification and negotiate the best possible terms for you.

Source: creditplus.co.uk