Living cost increases results in more debt for Brits

According to a recent report a rising number of Brits are falling into increased debt as a result of trying to keep up with the soaring cost of living on wages that have been stagnant for several years in some cases. Many households are struggling to keep up with the soaring cost of living, and some have been left with no other choice but to borrow money on credit cards, loans and overdrafts to fund the rising cost of living.

The report claims that Brits have now taken on the highest levels of debt since May 2009, which was the peak of the recession in the UK. Brits now have around £208.6 billion in outstanding debts on credit cards, loans, overdrafts, etc. which equates to around £9070 of debt for every household in the country. Petrol, food and energy costs are amongst the essentials that have increased in price, putting severe strain on household finances.

Excluding mortgage debt, the level of household debt in the past year has gone up by around £5 billion in total, which is the biggest increase since the recession according to the Bank of England. In the past month alone the level of debt has increased by £629 million in total, with economists stating that people have become reliant on credit simply to keep up with their rising bills.

One leading economist stated: “The rise in unsecured consumer credit suggests increased ‘stressed borrowing’ is occurring, with more people having to borrow to help finance their spending. This is a consequence of the extended squeeze on their purchasing power coming from elevated inflation, low wage growth and tighter fiscal policy. In addition, job losses are rising.”

Tags: unsecured consumer credit, cost of living, debt, Many households, outstanding debts, household debt

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Posted in: Brits,increases,living,results

Debt hit, cash strapped Brits love a bargain

As many people face mounting debt, frugal living has become second nature, according to new research.

One in two thrifty Brits admit to going out of their way to find a good deal, according to a price comparison website. 48% of people confessed that they love the feeling of securing a bargain. With many struggling with mounting debt it comes as no surprise that frugal living is a must in order to meet everyday expenses.

However, cheap living doesn’t have to be a chore, and 48% of Brits take great pleasure from making a saving either from as little as £1 or as much as £100. The research found that 24% of people said that it is something to be proud of and the feeling of achievement people get when they save money is not affected by the amount of money they actually save.

Not only that but 58% of Brits get greater satisfaction from telling people about the savings they’ve made. With so many discounts and vouchers widely available, 53% of people said they could go out of their way to save money.

63% of people admitted they feel cheated if they later find out they have paid more for goods than necessary or a cheaper alternative.

Women in particular are keen to find cheaper deals and over half of 18 to 34 year olds said they would rather save £500 on a purchase than be surprised by unplanned weight loss, illustrating how stretched people’s finances currently are.

Eight out of ten men would also rather receive £500 off a major purchase than have their favourite sports team win an important game.

“The most interesting aspect of the research for me is the fact that people feel so euphoric at saving money – irrespective of how much cash is involved,” said Christine Webber, Psychotherapist.

“I believe this is because of the difficult financial times we live in. We have little or no control over the stock markets, our pensions or how much longer we’re all going to have to work. So, hunting down a bargain feels like a real triumph and helps us feel that we have at least some control over our money.

“There is a real satisfaction to be had from knowing that we have done a deal and have not had to part with the full asking price for something that we want.”

The research found that 61% of people are now holding onto their money for the next big bargain. However, many people have to just hold onto their money to make ends meet.

Debt Solutions

If you are living the frugal lifestyle due to debt problems, seek out debt management advice so that you do not have to worry about your mounting financial problems. Solutions such as debt management or an IVA may help you address mounting personal debt.

Debt problems can soon crush the elated feeling of finding a good deal as cheaper living is a necessity rather than an alternative.

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Posted in: bargain,Brits,strapped

Brits spend 9 billion a month paying off debt

One in four Brits spends more than 40% of their wages on repayment of non-mortgage debt, the latest research has found.

According to a price comparison website, the average amount of debt paid off per person per month is £322.

Cash strapped Brits already struggling to cope with the rising cost of living and increased in winter fuel bills are also now paying off debt.

Britain’s skyrocketing personal debt is clear, with debt repayments swallowing up monthly incomes.

The average monthly income for a UK adult is £1,288 and if Brits are paying £322 out of that, that’s a staggering 25% of their monthly wage.

Shockingly, 8% of people said they spent 80% of their monthly income on debt repayment.

Women owe less money than men with only £6,739 in debt compared to £7,944 for their male counterpart.

Londoners have the highest amount of personal debt in the UK owing on average of £8,478 compared to those living in Yorks & Humber who owe an average of £5,796.

However, Londoners are less likely to pay off their debt. The research found that those living in the capital would use 22% of their monthly wage for debt repayment compared to those in the Yorks & Humber who will commit to 28% of their wage to paying off debt.

Single men and women are most likely to accumulate debt. Women aged between 40 and 59 are said to be those currently struggling with debt the most, according to the Consumer Credit Counselling Service.

Debt management solutions

Whilst it’s good news that Brits are paying off their debt, there could be more effective and efficient ways to manage debt problems.

By adopting debt consolidation to merge debts into easy repayments over a set period of time you could ease the repayment process without having to use up 80% of your monthly income!

Seek debt advice about effect debt solutions.

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Posted in: Billion,Brits,month,paying,spend

Brits need to focus on high interest debts

There are many people these days who use any spare cash that they have into savings in order to ensure that they have some money towards their future – which is something that would normally be highly commendable. However, many of these that are saving their spare money are also struggling with a range of high interest debts such as credit cards, loans and store cards, which means that they are effectively putting money into savings accounts that earn them little or no interest whilst wasting money on huge amounts of interest on their debts because they are dragging the repayments out.

One industry official has now said that it is important for those that have high interest debts to make sure that they put any spare money that they have toward repaying their high interest debts rather than putting it into a savings account that offers hardly any interest or returns. The warning comes from Justin Modray of online resource Candid Money, who said that in the current climate getting finances sorted was the most important thing to think about.

He said that many people were paying huge amounts of interest on their debts but rather than trying to pay them off when they had a little cash to spare they were simply putting the money into savings and continuing to pay huge levels of interest on the debts. He said that things were difficult for those that had no savings to pay off debts and that saving for the future for many people in today’s climate was something that was unattainable.

He stated: “Those fortunate enough to have savings can use them to stave off debt, but I think for many it’s more a case of just trying not to drown in debt and saving for the future remains a pipedream.”

Tags: Brits, interest, interest debts, Finance, debt consolidation, United States, little cash

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Posted in: Brits,debts,focus,interest

Brits become slaves to their energy bills

The number of UK families falling in to fuel poverty is rising rapidly according to the Department of Energy and Climate Change.

The worrying figures from their ‘Annual Report on Fuel Poverty Statistics 2011’ come alongside a statement from British Gas saying their fuel prices will increase come 18th August this year. Just eight months after prices were upped 7 per cent, the price of electricity will be raised by 16 per cent and gas by 18 per cent. This rise equates to an extra £200 pounds a year on their fuel bills.

These are alarming numbers for householders and are not made easier by the above report claiming that the number of families that fell into fuel poverty had risen from 4.5 million in 2008 to 5.5 million in 2009. The majority of these were in England, where the number rose from 3.3 million to 4 million in that year.

Matt McKenning, Operations Director of MoneySave, said: “Household finances are already being stretched and the upward trend in those falling into fuel poverty is very worrying.  With the recent news of further price increases in gas and electricity the number of people having to make the choice between being warm or being fed looks set to rise even further.

 “Consumers should be aware that fuel suppliers must give 30 day’s notice prior to any change in prices.  This allows householders the opportunity to shop around for the most competitive tariff.”

Kevin Still, Director of Atlantic Financial Management added: “Rising costs of living, notably fuel, energy and insurance premiums, are having a significant impact in reducing household disposable income and in many instances creating serious debt problems. One of our initial priorities as a debt adviser after undertaking a review of your financial circumstances is to prioritise payments, so that the essential ones are made to protect your house and key assets, like a car used for work.”    

A household is classed as living in fuel poverty when they spend 10 per cent of income on fuel to keep the household at an adequate level of warmth. Adequate warmth is defined as 21 degrees for a main living room and 18 degrees for other rooms that are occupied.

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Posted in: become,bills,Brits,energy,slaves,their

Brits with debt problems could save £300 a year on broadband

- Tuesday, 1 March 2011

Brits currently seeking debt help could save around £300 a year by bundling their broadband, home phone and digital TV into one package, with one provider.

That is according to broadbandChoices.co.uk, which also found that 28 per cent of British broadband customers are missing out on these savings by not bundling up their internet with digital TV or a home phone.

If someone wishes to become debt-free quicker, they could consider switching to a provider which offers all three things in one package as this can help them save money.

Michael Phillips, product director at the price comparison site, stated: "The cost of living is rising.

"British consumers need to review their spending to minimise the financial blow, therefore it is surprising that such a high proportion of British broadband customers do not realise that bundles offer excellent value for money."

People with debt solutions could also consider signing up to Talk Talk for their broadband and telephone as the package is currently being offered with a 50 per cent discount.

  Mon, 28 Feb 2011
Brits, including those seeking debt advice, may want to install a water meter in order to save money on their water bills... Fri, 25 Feb 2011
Parents seeking debt help should ask their children, who are earning a wage, to contribute towards their living costs... Thu, 24 Feb 2011
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... Wed, 23 Feb 2011
Brits concerned about their debt problems, which have been accrued through borrowing on a credit card, may want to consider using a zero per cent balance transfer card...

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Posted in: Brits,broadband,could,problems

Brits may need IVA help after failing to put savings aside

More and more British people may need to consider an IVA or Debt Management Plan as Research has revealed that the average person only has about £2,000 saved up.

Reports from ING have claimed that as little as £40 has been put away during 2009 and that the average saving is £2,000.

This is just over one tenth of the £20,000 saved on average of the previous few years. However, the figures may be somewhat skewed due to the wealthiest five percent accounting for over one third of the total UK consumer savings. With this section of the country removed from statistics, the average only rises to £2,205.

The Telegraph was told by ING Group chief economist Mark Cliffe;

“meagre level of readily accessible savings that most people have.

“This leaves them with a very small buffer if they run into trouble,” .

The latest Nielsen-British Retail Consortium consumer confidence survey found that more people are choosing to pay off debts in the current economic environment, compared to those who plan to increase their savings.

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Posted in: after,aside,Brits,failing,savings

Credit card debts are still a problem for millions of Brits

Debt Example

Here's how a debt management plan can help you repay debt. Benefit of a Debt Management Plan

Current monthly payment: Term: 10 years (for credit card) New monthly repayment:
Term: 3 years 8 months*

I would recommend Debt Advisory Line to anyone with debt problems, its reassuring to know there is someone out there who is willing to help you when you think you are sinking.

We aim to reduce debt in the shortest possible time. We are members of DEMSA - (The Debt Managers Standards Association). We adhere to the code of conduct as set out by DEMSA which aims to protect the interests of both consumers and lenders. The DEMSA code of practice is approved under the OFT (Office of Fair Trading) Consumer Codes Approval Scheme (CCAS).

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Posted in: Brits,Credit,debts,millions,problem,still