If you are struggling with your household finances and meeting your debt payments, a debt consolidation loan may help you manage your debts through one single monthly payment.

Credit Action’s data excludes mortgage debt and shows that the average household debt rose in March by £19 to £7,903. The increase follows a small reduction in February. On an individual consumer basis, the average UK consumer owes £4,231, an increase of £10 on the previous month. Data including mortgage debt shows that the average UK household owes £55,436, an increase of £52 on the previous month.

The report’s findings indicate clearly that the trend of personal debt reduction which has been developing month on month since January 2010 has come to an end at least for now. Debt level forecasts may now need revising with most analysts previously predicting that the trend in debt reduction would continue. A double dip recession, rising prices and a fragile job market mean UK individuals are continuing to feel the pinch and paying off existing debt has become difficult for many.

The total sum of all outstanding personal debt in the UK in March 2012 was a staggering £1.458 trillion, up £7 million on the previous twelve months. The figure is close to the UK GDP figure for 2011- the amount of all the UK’s total domestic output for the year.

The report by Credit Action shows also that purchases made using debit and credit cards increased in February to £1.5 million per day. The report does not provide a breakdown between debit and credit cards.

A recent survey by leading personal finance website moneysupermarket reveals that the average rate of interest on UK credit cards is 17.31% which means that an outstanding balance of £500 at the end of the month would result in an interest charge of £6.70 if only the minimum balance was paid on the card account. If you are paying high rates of interest on your existing credit cards a debt consolidation loan may be an attractive way of making your debt repayment cheaper and paying off your debts sooner.

Of course, using credit and being in debt is not of itself a bad thing. What is important is that you are able to manage repayments comfortably within your budget. With 319 individuals entering into some form of insolvency every single day in the first quarter of 2012 there remains cause for concern about people continuing to live beyond their means.

Credit Action advised in their report that in March 2012 £172 million was paid every day in interest charges on personal debt. It is essential that consumers stay in control of their personal and household finances and minimising interest payable on debt through a debt consolidation loan may offer a manageable and affordable solution for repaying your debts sooner.

The figures issued by the Council of Mortgage Lenders show an increase on the final quarter of 2011 but the lower figure in the previous quarter was anticipated as part of a regular seasonal pattern.

The Council for Mortgage Lenders (CML) who represent banks, building societies and other lenders who currently account for 95% of all mortgage lending in the UK, describe the current state of house repossessions as “stable”. CML indicate that projections previously made for 2012 of 45,000 homes to be repossessed may be revised downwards when they revise their forecasts later this summer. Any optimism is tempered by the UK economy having entered into a double-dip recession and household budgets continuing to feel the strain. With indications of increases in interest rates as well, there remains the potential for house repossessions to increase again.

Mortgage lenders repossess properties when the homeowner fails to make regular monthly mortgage payments, arrears accrue and there appears to be no prospect of the homeowner being able to resolve the difficulties they find themselves in. In recent years in particular mortgage lenders have endeavoured to be as patient and understanding as possible with customers finding themselves in financial difficulties. The figure of 36,200 homes repossessed in 2011 is less than half of the 75,500 houses repossessed in 1991 and is the lowest figure since 2007.

The CML report goes on to state that the number of home-owners with mortgage arrears is also down in the first quarter of 2012. Those with arrears amounting to 2.5% or more of the outstanding mortgage balance decreased in number to 157,800 which is a decrease on the previous quarter and on the same quarter of 2011. Perhaps more significantly, the number of property owners with arrears in the 5-7.5% band dropped by 12% and represents the lowest number of mortgages with this level of arrears since the final quarter of 2008. Those with arrears in the range of 7.5-10% dropped even more by 13% which is the lowest since the third quarter of 2008. It is not all good news though and mortgage payers with 10% arrears have actually increased and are at their highest level since June 2000.

Home-owners struggling to pay their mortgage are encouraged to approach their mortgage lender as soon as possible so that a suitable solution can be found and an agreement put in place to resolve the problem. Repossession action is very much the last resort and taken only when all avenues to resolve the situation have been exhausted. If you are struggling to pay your mortgage and other debts and expenses, professional advice should be sought at the earliest opportunity.

The Future of Long Term Care report, issued by London Victoria, anticipates that average long term care costs will rise by 27% in real terms over the period to 2025 from £26,000 to £33,000 per person per annum making a total annual bill for long term care in the United Kingdom of £37.9 billion by 2025. The figures exclude inflationary effects and are higher still with anticipated inflation built in.

The increase in the number of people requiring long term care in the years ahead and the rising costs of providing the care are attributed to longer life expectancy, families living further away from each other and women continuing their working lives for longer, when previously they would have otherwise provided the care themselves.

The report reveals that almost a quarter of those surveyed expect an elderly relative to require long term care in the future and only one in four expect to look after their relative themselves. One in five of those surveyed expect to fund their own care. Only just over half of those surveyed have given consideration to how such care is to be paid for and 24 % believe they will have to release money from their property to pay for care through equity release or house sale, 22% of those say they will pay for the care from savings and 19% from salary.

The funding and provision of long term care in future years are uncertain as living costs continue to rise, interest rates remain low and government support for social care faces cuts. People having to make provisions for care costs will face significant challenges and tough financial decisions. As costs rise, it becomes difficult to plan and budget for future care needs.

Presently, anyone in the UK with assets in excess of £23,250 is not eligible for state support for care, although in Scotland the rules are different. Recent research shows that the average wealth of those over the age of 55 is £32,500 meaning that many will have to fund the entire cost of care themselves with no state assistance whatsoever.

A recent report by economist Andrew Dilnot suggests a cap of £35,000 being placed on the amount people should pay for care and only those with assets in excess of £100,000 should meet the full costs themselves. Of those surveyed by Liverpool Victoria, the majority believed the cap should be set at a much lower level of £14,000 with 20% believing it should be means-tested rather than a flat rate. Almost a third of people believe the state should be care costs in their entirety.

Anyone considering raising monies from their property through equity release to pay for care should ensure they have received independent financial advice through a regulated advisor before doing so.

The government will be responding to the findings in the Dilnot Report shortly.

The CSA adds that personal debt has been increasing steadily for a number of years but an increase of £6 billion in only 6 months represents a marked increase in the number of people who are struggling to maintain their credit repayments. Whilst debt collection agencies have traditionally collected on behalf of mainstream lenders such as banks and credit card companies, there has been an increased utilisation of their services by utility companies, phone service providers and government departments. The emergence of pay day loans is yet to make a significant impact on the figures.

The effects of the economic difficulties on personal debt levels cannot be ignored and at a time when the Treasury seeks to make spending cuts it comes as no surprise that the Treasury and HM Revenue and Customs are engaging the services of debt collection agencies to recover outstanding monies due to them. Notably, a government report, Tackling fraud and error in government, states that outstanding monies due to government costs over £7 billion and 95% of that is due to Department for Work and Pensions and HM Revenue and Customs and the government believes that using regulated debt collection agencies represents the most effective way of recovering those monies.

An analysis of the total monies being pursued by debt collection agencies shows that £31 billion is being collected on behalf of creditors and the balance of £27 billion is due to debt purchasers who buy the debts from lenders. Debts collected on behalf of creditors tend to be more recent debt defaults and often easier to collect whereas debts purchased are usually older debts that have been passed back to lenders by debt collections agents and then sold on after unsuccessful recovery attempts and ultimately recovering these debts proves to be more problematical.

Whilst the debt collection industry is regulated, tactics adopted by them to recover monies often cause great distress to debtors. If you are struggling with repaying your debts it is essential that you seek professional advice at the earliest opportunity. Numerous remedies are available to individuals in financial difficulties including debt management plans and Individual Voluntary Arrangements and the sooner professional advice is sought, the easier it is to implement to right solution. The Insolvency Service reports that over 49,000 Individual Voluntary Arrangements were successfully implemented in 2011 alone.

High levels of duty on fuel and surging train fares are being attributed to the high costs paid in Britain and over 8 million households, being one in three households, are left in transport poverty as a result. The analysed costs take into account buying, running and maintaining a car. The average household spends more on travelling than they do on any other single item of expenditure.

The study also shows that workers are spending 20 minutes longer to get to work than they did just 10 years ago. The government Transport Secretary Douglas Alexander points out that is because people are travelling further to get to work

Comparisons made of sample rail fares in Britain and Spain show marked differences in cost. A one way standard class journey by train from London to Edinburgh, a journey of some 390 miles or so, costs £97 whilst a one way ticket from Madrid to Barcelona which is almost exactly the same distance (386 miles) costs only £47. A business traveller going from Manchester to London must pay £423 for an unrestricted return. A comparable first class ticket from Paris to Lyon by TGV train is £235 return.

Rising costs of travel hit young people, rural communities and low income families the hardest because they have to travel because they must work and there is increasing evidence of people giving up jobs because of the costs of travel to work.

The government has long recognised the need for investment in Britain’s transport infrastructure and has invested heavily on improvements but with longer travelling times to work and rising costs more needs to be done to address the problems travellers face.

Above inflation price rises on the rail network earlier this year have added to the burden of train travellers. In areas where prices are subject to regulation season tickets rose by 4.3% which is approximately 1% over the inflation level. In unregulated areas the news is worse and private operators have increased fares by 7.3%.

Train companies deflect criticism of rising prices by explaining the extra monies are used to reinvest in improved services for customers but with price increases above inflation for the 4^th successive year customers are failing to be impressed.

Transport Secretary, Douglas Alexander counter-balances the argument and points out that transport costs are more heavily subsidised in Europe through higher taxation rates than Britain and as our taxes are less the public must pay for their transport at the point of ticket purchase.

A double-dip recession is a recession (two successive quarters of negative growth) followed by a short term recovery during which gross domestic product (GDP) enjoys some positive growth, followed again by another recession. The problem with the “second dip” into recession is it can often be much deeper than the first and much more difficult to enter the recovery phase again.

The nation awaits the release of figures from the Office for National Statistics (ONS) this week and economic experts predict the narrowest margin of growth of 0.1% in the first quarter of 2012 thereby avoiding re-entry back into recession on a mere technicality. If predictions are wrong, then Britain will be in a double-dip recession for the first time since 1975. If you’re a “glass half full” kind of person you might see even the narrowest margin of growth as a positive sign that recovery is underway but economists predict that Britain’s economic prospects remain decidedly gloomy for at least another 6 months or so.

Retail sales have been ahead of forecasts but were helped by panic buying at the fuel pumps recently. Unseasonably warm weather in March contributed to upward growth in retail data also but despite additional positive indications elsewhere in the economy, such as the service sector and manufacturing, confidence remains fragile. Naturally, it will be politically expedient for the Chancellor, George Osborne to talk up growth in retail, manufacturing and the service sectors and we can expect to hear some positive words from him in the days ahead. Nevertheless, it is the actions of business leaders and consumers that will drive the economy out of recession and currently caution remains the keyword as business owners remain reluctant to invest and consumers refuse to spend.

Additional data showing growth in the construction industry are under scrutiny and the Bank of England remains dubious over their accuracy and meaning due to there being no adjustment for seasonal variations and the data sets being new. The construction industry accounts for 7.6% of all economic activity and is seen as a strong driver in the overall economic performance of the country. Sceptical economists believe that if the construction industry data is stripped out of the overall GDP statistics or were more reliable, the country would indeed be back in recession.

Consumers continue to notice the increases in prices of household goods which in turn provide the figures for inflation. A combination of higher inflation, high unemployment and low wage growth leave consumers gloomy and a survey by the research firm Markit indicates that the British public remain pessimistic about their own future financial prospects with only 25% of people surveyed believing things will improve.

Source: Debt Management Company

Organise your paperwork

Get started by gathering together all your bank statements, credit card statements, bills and all the other documents and papers that make up your personal financial world. Separate them out bank by bank, account by account, and place them each into chronological order. Put them into folders or files and mark them up to help identify them.

Prepare a budget

Put together a schedule of all your household income and expenditure. Consider using a spread sheet for this purpose so that all totals and calculations are automatically made for you. Make sure you subtract your expense total from your income figure. Do you have a surplus of income or are you spending more than you earn? Make sure you know.

Be honest with yourself through the process of analysing your spending and use your bank statements to help you assess what you spend in the supermarket each week and how much cash you withdraw for incidental expenses.

Getting the best deal

Bank interest and savings- Are you receiving interest on your current account? If you don’t receive interest then consider moving your bank account to a bank that pays interest. Moving bank accounts is less painless than it seems and all the main banks help move over your direct debits and standing orders for you. Do you leave surplus income in your current account each month? Make sure you transfer any regular surplus monies into an interest bearing savings account. It’s the start of a new tax year; are you making the most of your tax free ISA allowance? The earlier in the new financial year you open your ISA account, the longer you have in the tax year to enjoy tax free growth on your savings.

Credit card interest and charges- If you tend to have an outstanding balance on your credit card statement each month take a look at any 0% interest deals on rival cards and move over your balance to a new card. Make sure you know when the interest free period ends so that you can prepare to take advantage of any low or 0% interest offers elsewhere.

Utilities- Gas and electricity prices have increased significantly over the past few years but there is no need to stay with your current supplier if cheaper services are available elsewhere. Go to one of the many comparison websites and check for a better deal. Changing energy supplier is easy and could save you a lot of money.

Insurances- The cost of motoring insurance continues to rise dramatically and checking a comparison site for a better deal could save you hundreds of pounds. For household insurance, ensure you are not over-insuring your property. You need only insure the rebuild cost of your property and not the market value. The Association of British Insurers has an online calculator to help you ascertain the correct amount to insure (www.abi.org.uk)

Energy saving grants

Government and local authorities have numerous grants available to promote household energy efficiency and saving. Make sure you check to see if you qualify for loft insulation or a new condenser boiler for your home.

Adding to the woes of would be property purchasers is the reduction in the availability of mortgages and the generally higher deposits required to help fund any purchase. Data analysed by estate agency group Countrywide, shows that one in five people wanting to buy a property are precluded from doing so because of the size of the deposit required. Most notably, amongst 18-34 year olds wanting to buy, almost half of those surveyed cited large deposits as being the reason they are unable to gain a foot on the property ladder.

As property prices continue to rise in London, the problem is felt even more acutely in the capital with some 27% of all homes being privately rented. This amounts to 900,000 homes and overtakes social housing in London for the first time which stands at 24% of all properties.

The challenges for the housing industry and the government are twofold. If demand for rental properties reaches the level predicted by 2016, a further 1.1 million more rental properties will be required. This will require investment of £200 billion, yet only around £50 billion will come from buy to let funding. Meanwhile there is growing pressure on the government to address the issue of people wanting to buy property but being unable to do so. The argument that the property market adds to GDP growth is a compelling one as the economy will receive a welcome boost. Measures suggested to help buyers into the market include mortgage relief for first time buyers, incentive schemes for building development projects and government-set targets for mortgage lenders.

Britain has long been a nation of property owners yet faces the prospect of current and future generations being unable to own their own home. The survey by Countrywide indicates that attitudes and aspirations to property ownership have not changed and only 32% of people living in rented accommodation surveyed said they were happy where they lived.

House price affordability, which is measured as being prices less than 4 times annual earnings, remains a problem yet there are some indications of improvement. Halifax claims that affordability for public-sector workers has improved since 2007 and that amongst public sector occupations, the average worker could afford to buy a home in 41% of towns across the UK compared to a mere 3% when property prices peaked in 2007. The concentration of affordable towns in the north leaves considerable affordability problems for key workers in the more expensive towns in the south east.

The consequence of affordability is higher rental prices but whilst property prices remain high and mortgage availability low, demand in the rental market is expected to remain strong.

Negative equity becomes a real problem for homeowners aspiring to move as they become trapped in a property whose value is not sufficient to pay off the mortgage.

The report issued by Standard and Poor shows that the number of home-owners across Britain in negative equity had increased from 3.6% in early 2010 to 5.6% by the end of 2011. The crisis is being particularly felt in the North East of England where the number of houses in negative equity stands at 11.9%. The North West is also badly hit with 11.5% of properties in negative equity. By comparison, in South East England 3% of properties are worth less than the outstanding mortgage balance.

Why then are so many homeowners trapped in this position and why is there an apparent North/South divide? There has of course always been something of a North/South divide in the British property market. Higher population density and better job opportunities in the South of the country have historically placed greater pressure on the housing market causing upward pressure on prices through a shortage of available properties to satisfy demand.

There are a number of contributory factors to the current negative equity problems across the British property market. Since peaking prior to the credit crunch in 2007, prices in the North East have declined more than 20%. The deterioration in property prices have been felt across Britain leaving many with homes worth less than their outstanding mortgage. Changes in house prices since the trough in the downturn in 2009 show only a 3% increase in the North whilst in London for instance, prices have increased by almost 17% and there are consequentially less homeowners stuck in negative equity in the capital.

The effect of growing mortgage arrears is another factor and a regional divergence in the level of arrears is noted by Standard and Poor in their report. The arrears are being driven by diverging trends in regional unemployment rates which have been developing since 2010 and higher unemployment rates in the North of Britain are at least in part responsible for higher levels of mortgage arrears.

Furthermore, the North is more dependent upon public sector employment than the South with some 22% of jobs in the North being in the public sector and the impact of public sector job cuts is starting to take effect. The Office for Budget Responsibility anticipates that public sector job losses will reach in excess of 700,000 by 2017. These redundancies will continue to disproportionally affect mortgage borrowers in the North for some time to come.

Source:Debt Consolidation Loans Online

Household names like La Senza, Past Times, Peacocks, Game and Blacks have all hit troubled times and fallen into the hands of administrators. Naturally there is a direct impact on jobs and analysis shows that in the 69 firms that entered into administration in the first quarter of 2012, some 10,000 jobs from a combined workforce across the businesses of 22,000 were made redundant.

You may wonder why high street stores are suffering so much. Online shopping continues to grow and high street stores are finding it difficult to compete and adapt to the changing demands of the consumer and the way in which they shop. Combine these factors with the recessionary consequences of falling demand in the economy as a whole and administration, shop closures and redundancies are the result.

Analysis of the problems encountered by high street retailers entering administration show that in most instances retailers have too many unprofitable units which impede the performance of the retailer as a whole. It then becomes the task of the administrator to identify the profitable stores for onward sale and shut down the loss making units, which then results in the redundancies.

It is interesting to note that if retailers are excluded from the administration statistics, the number of administrations is actually down by 10% on the previous 12 months. Whilst that may be good news for other business sectors, these are challenging times for high street retailers.

So what then for the shop workers entering the job market looking for new work? The challenges being faced by businesses and employers as the economy continues to suffer, means that employers are reluctant to invest in new staff recruitment and the job market remains very difficult indeed. Work-seekers need to remain flexible and adaptable and shop-workers made redundant by retailers may need to consider entirely new careers and re-training.

It is no coincidence that the number of people seeking to enter into self-employment is increasing. Redundancies and poor job prospects are resulting in many individuals investing redundancy money and savings in starting a new business. Figures show that the number of individuals registering with HMRC as self-employed rose by 2.3% last year, and the number of people registered as self-employed at the end of last year stood in excess of 4 million. The figure represents 14% of the entire UK workforce.

If you have been made redundant, be sure to seek advice regarding your entitlements in terms of redundancy pay, pay in lieu of notice, and holiday pay. Redundancy pay may be paid tax free up to £30,000 but is subject to rules and conditions. Be aware also that redundancy pay may affect your entitlement to benefits. It is important to seek advice.