February 2011 ~ Debt Managements and Consolidation

Cost of raising a child outstrips inflation

The cost of raising a child has rocketed to £210,000 according to research from the insurer LV=.The amount parents spend on their offspring to the age of 21 has risen by 4.5% over the past year, ahead of the current rate of inflation which currently stands at 4%. The figure is up by 50% or £70,450 since 2003 when LV= first carried out the report.Over the course of a year, the figure breaks down to £10,040 annually, £836 a month or £27.50 a day.Childcare and education costs remain parents’ biggest area of expenditure costing £67,430 and £55,660 respectively over an offspring’s childhood. LV= do not include the cost of private education in the annual study but do cover school uniforms, after-school clubs and university tuition fees. Costs in...

Posted in: Child,inflation,outstrips,raising

Buying a holiday on a credit card could lead to debt problems

People should avoid making big purchases on a credit card unless they intend to pay the bill in full each month, as they could easily get into debt problems.Such is the advice of Justin Modray, from financial advice website candidmoney, who also stated that using a credit card to purchase a holiday can be beneficial as it offers protection on purchases over £100.He said: "Credit cards are usually an expensive way to borrow money so try to avoid using cards for big purchases unless you plan to repay the bill shortly afterwards."Therefore, if consumers do not want to end up needing debt solutions in the future, they may want to avoid borrowing money on a credit card.Research by Travelex, which was released on February 22nd, showed that 26 per...

Posted in: Buying,could,Credit,holiday,problems

Parents with debt problems should ask earning children for help

- Friday, 25 February 2011 Parents seeking debt help should ask their children, who are earning a wage, to contribute towards their living costs.Such is the advice of Dave Rodger, managing director of the Debt Advice Foundation, a national charity.He said: "While it is understandable that parents often don't feed their children, even when they are earning a wage, they should pay to live in the family home."Parents should be able to ask their children to contribute even though it is a hard conversation to have, he added.Those seeking debt solutions with non-dependant children who do not contribute any money may find it harder to be accepted onto a debt management plan than those who have children who pay a percentage of their income to their...

Posted in: children,earning,parents,problems,should

Repossessions fall sharply

The number of homes repossessed by lenders in the UK dropped by 24% to 36,300 last year, according to the Council of Mortgage Lenders (CML).The final three quarters of 2010 saw 1,000 fewer repossessions compared to the previous quarter with evictions dropping from 8,900 to 7,900. This was the fifth consecutive quarterly fall since repossessions peaked in 2009.The CML had previously predicted that 53,000 homes would be repossessed during 2010. Their forecast was revised down after repeated quarterly falls.The number of homeowners in arrears of 2.5% or more of their outstanding loan value also fell last year, by 13% to 169,600.Low interest rates, government schemes designed to help homeowners struggling to meet their monthly repayments and greater...

Posted in: Repossessions,sharply

Over-50s hit hardest by downturn

People aged over 50 have been hit hard by the economic downturn according to a report commissioned by Saga, the consumer group for the older people.“Baby boomers” coming up to their retirement are being stretched by above average inflation, higher unemployment, dwindling savings and falling incomes.The report, compiled by the Centre for Economics and Business Research and the polling group Populus, found that real deposable income for the age group has fallen from £34,366 to £33,900 year-on-year.Some 28% of the 13,000 over-50s questioned said that they felt their standard of living had deteriorated over the last year compared to just 8% who thought their financial situation had improved. Around 23% said they were not as happy as they were...

Posted in: downturn,hardest,Over50s

Property prices could fall by one-fifth

House prices could fall by up to 20% over the next two years as rising unemployment and spending cuts stifle demand, according to analysts.The prospect of higher interest rates and stricter lending criteria from banks is also likely to add to the downward pressure on house prices in the near to medium-term.The average UK home lost around a fifth of its value post-credit crunch between mid-2008 and the end of 2009. Half of these losses were regained last year thanks mostly to record low interest rates.The Bank of England is under mounting pressure to increase interest rates in the light of runaway inflation that is likely to peak at around 5% later in the year. The Bank’s analysis that rocketing prices are the result of “temporary” pressures...

Posted in: could,onefifth,Prices,Property

Ten million Britons have nothing good to say about their bank

Two out of every five consumers are dissatisfied or indifferent towards their current bank, according to a study by the “ethical and sustainable” Triodos Bank.The research showed that ten million bank customers cannot find a single reason to recommend their bank to others.Customer service was the main reason for people’s dissatisfaction with 38% of those surveyed saying they would not recommend their bank after poor experiences.Around 29% of the 2,000 adults questions claimed they were unhappy because their bank does not treat them as an individual.Only 6% of customers picked their bank based on recommendations or its reputation for good customer service. Almost one in five admitting that they chose the bank nearest to where they lived or...

Posted in: about,Britons,Million,nothing,their

Parents save more in anticipation of tuition fee increase

The controversial hike in university tuition fees has resulted in parents putting more money aside for their children’s education, according to new research.The rise, which will apply to students starting their degree course in 2012, is the main factor behind a rise in savings in recent months.The study by ING Direct bank found that accessible savings among those questioned rose by 3.6% in the last three months of 2010. The increase was largely driven by the 23% of parents who said they were saving more or setting up university accounts to help their children meet rising costs.The standard level of tuition fees will rise to £6,000, up from the current level of £3,290. But some universities will be able to charge up to £9,000 if they fulfil...

Posted in: anticipation,increase,parents,tuition

OFT warns debt management service over misleading claims

The Office of Fair Trading (OFT) has taken action against a company for making misleading claims in its advertising that suggested it was a debt charity.The trade body told Money Advice Direct Limited, a debt management lead generation firm, that it was concerned about content in its marketing material and on its website that encouraged consumers to believe that it was a not-for profit-organisation offering debt management services.Money Advice Direct Limited, which traded as The UK Insolvency Helpline, is a commercial business that passes the details of debtors on to paid-for debt management companies in return for a fee.The OFT compelled the company not to imply that it is a publicly funded body or a debt charity and to make clear to potential...

Posted in: Claims,Management,misleading,service,warns

One fifth of Britons have no savings

Thursday, February 17, 2011, 13:08Nearly 20% of Britons have no savings whatsoever according to a study carried out by the market research consultancy Mintel.The research also found that a further 35% of the population have less than £500 put aside for emergencies.Women are least likely to have any savings stashed away with 22% confessing to having absolutely nothing put by for a rainy day. Men fare little better with 17% admitting to having no savings at all.The figures make worrying reading at a time when attention has been focused on the likelihood of the economic situation worsening over the coming months and the importance of establishing a financial cushion. Families with little or nothing to fall back on could face serious problems...

Posted in: Britons,fifth,savings

Liberalisation of laws blamed for surge in gambling

Britons looking to escape the pressure brought on by tough economic times are increasingly turning to gambling, according to report by the UK Gambling Commission.The British Gambling Prevalence survey found that almost three-quarters of the country’s adults engaged in some form of gambling last year and that over half a million people could have a serious gambling problem.Church groups and charities voiced concerns that problem gambling appeared to have risen since betting laws were liberalised by the Labour government in 2005.The survey of 7,756 adults over 16 found that 59% of those questioned had played the National Lottery at least once in 2010, up from 57% in 2007, making it the most popular form of gambling in the country. Private betting,...

Posted in: blamed,gambling,Liberalisation,surge

Almost half of Britons expect their finances to deteriorate

Four out of ten Britons expect their financial situation to worsen and nearly half are worried about the amount of debt they have, according to a study by the insolvency trade body R3.The survey showed that the number of people concerned about the level of debt they are carrying increased by 6% in the last quarter of 2010. Some 45% of those questioned said they were worried about the amount they owe.Around 43% of people said that they thought their finances would deteriorate over the next six months, 13% more than the last time R3 conducted the same study in October 2010.The research found that the young are more likely to worry about their financial situation and debt than older people. Some 57% of those aged between 25 and 34 admit to having...

Posted in: Almost,Britons,deteriorate,expect,finances,their

Gold brokers told to polish up their act

The Office of Fair Trading (OFT) has ordered online cash for gold companies to improve the way they treat their companies.The consumer watchdog told CashMyGold, Cash4Gold and Postal Gold to make changes to the way they lock customers into accepting offers and melt gold down if they have not received a response within a “restrictive time period”.Two companies, CashYourGoldNow and Money4Gold, ceased trading as a result of the OFT probe.The recession and the high price of gold has seen the popularity of cash for gold services rocket over past few years as viewers of daytime television will testify.The three companies involved have all agreed to change their trading practices and provide people with either a quote for their gold that requires...

Posted in: brokers,polish,their

Welfare cuts will cost working families thousands

Friday, February 11, 2011, 12:02Welfare cuts to be made over the coming years will leave low-paid families thousands of pounds worse-off despite the coalition government’s claim that there will be “no losers” from its austerity measures.Research carried out by the TUC has found that a family with two children, with both parents in minimum wage jobs, could lose more than £2,700 a year by April 2013 as a direct result of changes to the tax credits and benefits systems.The loss to the lowest income groups could be much higher once housing benefit is capped, elements of working tax credit and child benefit are frozen and the child trust fund is abolished. Middle-income earners will suffer from the ending of child benefit for higher rate taxpayers.The...

Posted in: families,thousands,Welfare,working

Inflation hits 4%

UK Inflation rose to its highest level in two years in January putting more pressure on the Bank of England to raise interest rates.The UK Consumer Prices Index (CPI) rose to 4%, up from 3.7% in December, as the effects of the VAT rise, higher oils prices and increases in the cost of alcohol, food and furniture fed through.Rates have now been at least 1% above the bank’s target of 2% for 14 months.The Retail Prices Index (RPI), which includes mortgage interest payments and is the preferred measure of inflation for wage negotiations, rose from 4.8% to 5.1%.This was the first CPI December to January rise since records began. Inflation is usually flat after the Christmas period as retailers discount stock in the sales. Despite this, some economists...

Posted in: Inflation

Which? calls on OFT to rein-in “excessive” card charges

The consumer group Which? is poised to make a “super complaint” to the Office of Fair Trading (OFT) about “excessive” debit and credit card charges customers are forced to pay when buying flights, cinema tickets and other goods and services.The watchdog is calling on the OFT to investigate the charges, which it says are often “sprung” on customers at the last moment such as when they check out to pay for a purchase online, and says they are often far in excess of what it costs the retailer to process a transaction.Budget airlines are among the worst offenders with some charging a card fee per leg of journey despite the fact that payments are processed in a single transaction.A family of four booking a return flight with Ryanair would be charged...

Posted in: Calls,charges,excessive,reinin,Which

First-time buyers face uphill struggle

First-time buyers need to save more than the national average annual wage to be able to get a foot on the housing ladder, the Council of Mortgage Lenders (CML) has said.At the start of 2007, a typical mortgage required a deposit of £12,700 which rocketed to £31,500 by the second half of 2010. The average age of a first-time buyer has been pushed up to 37 as a consequence according to government estimates.The figures were released as housing minister Grant Shapps summoned various parties to discussions on the difficulties facing first-time buyers.Michael Coogan, director-general of the Council of Mortgage Lenders, warned that there is no “magic bullet” that will immediately remove the hurdles faced by frustrated tenants looking to buy their...

Posted in: buyers,Firsttime,struggle,uphill

Rent prices down in buoyant buy-to-let market

The cost of renting a home in England and Wales fell in January, according to a survey from LSL Property Services.The latest Buy-to-Let Index from the UK’s biggest letting agency network also showed that rent arrears were down month-on-month from December.Average rents fell 0.3% to £682 but are still 4% higher than they were this time last year. Although the January fall marked the second consecutive monthly decline in the rental market, landlords have reason to be optimistic with signs of renewed growth in certain areas.Demand for rental properties remains high as a consequence of the flat housing market and the difficulty first-time buyers are having in finding mortgages.The slight dip in rent prices is in part due to the return of confidence...

Posted in: buoyant,buytolet,market,Prices

Rising childcare costs and government cuts heap pressure on working families

Low-income families and working women are being priced out of nurseries and forced out of their jobs as childcare costs rise twice as fast as wages.A survey by the Daycare Trust, the national childcare charity, found that while pay rose 2.1% over the past year, the cost of a nursery place for a child aged two or over increased by 4.8%.London and the south-east saw the biggest price rises but the most expensive nursery in the survey was in the West Midlands charging £11 an hour. Parents needing 50 hours of childcare provision every week could pay more than £28,000 a year.The increase in costs come as parents already struggling with rising prices and flat wages are faced with cuts to Sure Start centre funding and reductions in tax credit and...

Posted in: childcare,costs,families,Government,pressure,Rising,working

Young Britons priced out of family life

Young Britons are being priced out of marriage, home-ownership and parenthood according to study by First Direct.The internet bank says that today’s twenty-somethings would need to nearly double their wages to enjoy the type of lifestyle their parents had at their age.The average Briton in their mid-20s would need an annual salary of £39,720 to buy a house, pay for a wedding and have their first child – all milestones their parents’ generation had passed at that age. To buy a house at the same level of affordability as their parents could at the same age, the average twenty-something would need to be earning £44,600.Someone in their mid-20s can expect to earn an average of £25,500.A couple who married in 1985 could have expected to pick up...

Posted in: Britons,family,priced,Young

Mortgage approvals fall 13%

The UK mortgage market started the year in rocky fashion with lending down by 13% in January from December.The £9.2 billion advanced to homebuyers last month, down from the £10.6 billion lent in December, was still 5% higher than the amount lent last January, according to the Council of Mortgage Lenders (CML).The lending figures are the lowest since February of last year and reflect the “sluggish” nature of the UK economy as a whole and a general lack in demand.The month-on-month fall is likely to have been caused, at least in part, by the arctic weather conditions in December that prevented many house hunters from viewing properties.The CML data is compiled from figures supplied by banks, building societies and other lenders who make up some...

Posted in: approvals,mortgage

Nationwide urges caution of broker advice

The Nationwide has warned homeowners to be cautious of mortgage broker’s advice to sign up to a fixed-rate deal.Chris Rhodes, Nationwide’s product and marketing director, said that brokers who have suffered from the slump in mortgage lending over the past year have an incentive to encourage consumers to fix. Brokers earn a commission when they sign clients up to a new mortgage deal and receive a higher fee for fixed-rate products.Thousands of mortgage holders have allowed their fixed deals to expire to take advantage of lender’s standard variable rates (SVR) which have been kept low by the Bank of England’s decision to keep the base rate at 0.5%.Some analysts have been urging homeowners to switch to a fixed-rate deal as higher than expected...

Posted in: Advice,broker,caution,Nationwide,urges

Water bill amnesty receives trickle of responses

Thames Water has warned nearly 15,000 people who have been using water without paying for it that they could face six years worth of back charges if they do not come forward before 3 March.The UK’s biggest water supplier has been checking around two million addresses across the Thames Valley region and London as part of an audit. It has found a number of properties that haven’t received a water bill for years.The company, which supplies water to three million homes, says the problem has arisen as older properties have been divided up into flats and bedsits over the years and nobody has informed it of the changes. Larger properties that have been split into multiple residences have only been receiving one water bill as a consequence.Water accounts...

Posted in: amnesty,receives,responses,trickle,Water

370 Britons a day declared insolvent last year

Wednesday 9th February 2011 Figures published by the Insolvency Service have revealed that over 135,000 people were declared insolvent in 2010, up 0.7 per cent on previous year and at its highest since 1960. This means that 370 people a day were declared insolvent in each day of last year, and that the number of people who can’t keep up with their debts has doubled in the last five years.Commenting on these latest figures, Steve Law - president of the insolvency trade body R3 - said: “Unfortunately, for those that are struggling with debt the worst may not be over. Inflation, the rise in the cost of fuel and the increase in VAT means that the cost of living has risen at a time when most of us are experiencing pay freezes, pay cuts and...

Posted in: Britons,declared,insolvent

PM warns: Debt problems will not be aided by tax breaks

Prime Minister David Cameron warned that despite increasing living costs there will be no “substantial” tax breaks in the near future to help Britons deal with their debt problems despite the fact that personal debt in the UK has reached nearly £1.5 trillion and insolvency rates have also risen to record levels.In an interview with the Sunday Telegraph, he remarked: “I’m a tax-cutting Tory and I believe in tax cuts, but when you’re borrowing 11 per cent of your GDP, it’s not possible to make significant net tax cuts. It’s no good saying we’re going to deal with the deficit by cutting spending, but then we’re going to make things worse again by cutting taxes,” the prime minister added.One reason inflation will have troubled many people with...

Posted in: aided,breaks,problems,warns

Calls for financial education to become part of national curriculum

The 120 MPs of the All Party Parliamentary Group on Financial Education for Young People are lobbying for compulsory lessons regarding debt avoidance in schools.The group already coordinates the various government agencies focused on the issue, and they want to make resources available to schools that want to teach the subject.Justin Tomlinson, chairman of the group, said to the Telegraph: “Young people are entering an increasingly complex financial world of store cards, mobile phone tariffs, credit agreements and financial marketing.Through my MP casework, I have seen first-hand the implications for those who have made poor decisions, too often through a lack of understanding.“I am passionate that financial education is the best way to...

Posted in: become,Calls,curriculum,education,financial,national

Bankruptcy versus IVA

Neil Morrissey recently opted for an individual voluntary agreement rather than bankruptcy when his investments in a property company resulted in him falling into financial difficulties, while the Eastenders actor Joe Swash opted for bankruptcy rather than an IVA when he also found himself with debt problems. So, which is the best option if you find yourself with money troubles?Credit-rating agencies such as Experian do not really differentiate between bankruptcies and IVAs, but there are still some crucial differences to be considered when weighing up the two options.Bankruptcy is discharged after a year but stays on one’s credit file for five years, which could result in difficulties getting credit and contracts. IVAs also affect one’s credit...

Posted in: Bankruptcy,versus

Yorkshire IFA granted esteemed status

It has just been announced that a Yorkshire based Independent Financial Advisor has achieved the Corporate Chartered status. Harrogate Financial Solutions Ltd has been granted this new status by the Chartered Insurance Institute having met its rigorous criteria related to professionalism and capability. All Chartered firms commit to the Chartered Insurance Institute’s ( CII’s) Code of Ethics. This code encourages the highest professional and ethical standards in insurance and financial services worldwide. By awarding Harrogate Financial Solutions Ltd the status, CII believes that the firm have the high standard of professional practise in their business dealings required. Paul Smith, Director of Harrogate Financial Solutions, commented:“To...

Posted in: esteemed,granted,status,Yorkshire

Ex-Leeds United director bankrupt for another decade

Leeds County Court has extended the amount of time that a former Leeds United director and property developer will be bankrupt by another ten years after he failed to reveal all of his assets to recovery specialists representing his creditors.The court ruled that Mr Simon Morris had “dealt with monies held in bank accounts in his name after the date of the bankruptcy order to the detriment of his bankruptcy creditors.”His company SRM Holdings had a portfolio of over 500 residential and commercial properties in Leeds, but went into administration in October 2008 with debts of over £50million owed primarily to high street banks. Mr Morris was consequently made redundant and declared bankrupt a year later.A bankrupt is normally discharged after...

Posted in: another,bankrupt,decade,director,ExLeeds,United

OFT warns lead generator

The OFT announced yesterday that they had imposed ‘requirements’ on a debt management lead generation company, due to their misleading advertising. Money Advice Direct Limited (MADL), are a licensed lead generator, who introduce people to either debt management or Individual Voluntary Arrangement (IVA) providers via their website. However, the OFT has raised concerns over some of the advertising on the website, which led readers to believe that MADL was a non-profit organisation that was offered debt solutions rather than a commercial business that merely passed on contact details to other providers in exchange for a fee. The OFT's Director of Consumer Credit, Ray Watson, said: “It is important that consumers seeking help for debt problems...

Posted in: generator,warns

Demand for more protection against phoenix companies

A recent survey of SMEs has highlighted the controversy surrounding insolvency law, with 96 per cent of those questioned saying they thought insolvent firms should not be allowed to launch similar companies. Carried out by the debt collection agency, Daniels Silverman, the survey demonstrates the concern felt by SMEs over the practice of pre-pack administrations – often dubbed as ‘phoenixing’ and seen as a method whereby insolvent firms ‘dump their debt’. Commenting on the findings, Carole Hughes, managing director at Daniels Silverman, said: “Our survey results indicate that many SMEs would like a rethink in insolvency law to protect companies from unscrupulous directors that take advantage of pre-pack administration. “They have told us they are becoming more and more frustrated by...

Posted in: against,Companies,Demand,phoenix,protection

Interactive tool launched to support insolvency professionals

A Consultant Company have introduced an interactive tool which is set to assist debt management solutions providers by creating a more widespread picture of a client’s indebtedness. The Debt Consolidation Accelerator recently launched by London-based DPR Consulting, claims to allow intermediaries and lending staff to capture a more detailed picture of an applicant’s financial situation. Ian Wilson, Business Development, DPR Consulting, said: “The Debt Consolidation Accelerator is an interactive tool which captures a comprehensive overview of how indebted an individual is.” The Debt Consolidation Accelerator works by enabling the user to input a client’s income and monthly outgoings. The results generated by the accelerator can...

Posted in: Insolvency,Interactive,launched,professionals,support

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