Scots have been tackling their debts over the past year

Whilst many of us these days are struggling with our personal debt levels, it seems as though people in Scotland are determined to take action to try and reduce their debts. Recent figures have shown that more people in Scotland are paying down their debts than in any other part of the country. Over the past twelve money many Scots have managed to reduce their debt levels based on the study, which was carried out by the Centre for Economics and Business Research.

The study showed that more than a quarter of Scots were now in less debt now than they were this time last year. The national average when it came to the number of people in less debt than last year in Scotland was 27.6 percent according to the latest Credit Confidential Credit Report.

The figure for Glasgow was higher than the national average, with 32 percent of people in the city being in less debt than they were a year ago. In Edinburgh the figure was 19 percent, but although it was lower than the national average it was still higher than other capital cities across the UK such as London, which stood at 15 percent and Cardiff which stood at just 4 percent.

A Credit Confidential official said: “The recent debate, stoked by David Cameron suggesting people pay off their credit card bills, seems to be redundant for many Scots as they have been offloading debts in the past three months anyway. However, with Christmas coming, unemployment rising and inflation increasing, if consumers cannot access credit easily from the high street and traditional lenders, some may be forced to borrow from less reputable sources such as loan sharks.”

Tags: reputable sources, Business Research, anyway, glasgow, Recent figures, inflation, scots

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People in their 30s and 40s face the highest level of financial pressure

For many people these days, the financial pressures are mounting up with a huge number of people struggling to keep on top of their finances and many finding it hard to keep up with payments on bills and rent or mortgage never mind additional debts such as loans, credit cards, overdrafts and other forms of unsecured debt.

A recent study has been carried out with the results showing that it is actually people that are in their mid-thirties to their mid-forties that tend to face the greatest level of financial pressure and debt. Between these ages, according to the study results, spending on credit cards and mortgage repayments is higher than at any other time of the life. The study was carried out by Standard Life.

Between the mid-thirties and mid-forties overall spending on bills, debts and household financial commitments reaches around £1160 per month on average. Mortgage repayments account for around £600 whilst credit card payments account for about £350. However, when it came to loan repayments, not including student loans, it was actually people aged fifty five and over that were under the most pressure.

The data was revealed as part of a report entitled Your commitments, Your Future, which is part of a wider campaign to help people to develop greater understanding with regards to financial commitments at different times of life.

An official from Standard Life said: “This understanding can help substantially with planning our personal finances so that we can feel confident about the future and achieve our goals. If people were to dedicate more time to their long term financial planning, they wouldn’t just be better off financially, they’re likely to be better off all round.”

Tags: different times, credit card, credit cards, financial commitments, term financial planning

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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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Parents need to speak to their children about debt

Over the past few years the huge problems facing millions of households in the UK due to debt issues have become increasingly prevalent. The global financial crisis and recession has put the focus firmly on these debt problems, and with job losses and government cutbacks adding to the issues the various debt charities that are in operation in the UK are experiencing difficulties in keeping up with demand for debt related advice.

As a result of the issues that have stemmed from high personal debt levels across the UK many have called for the school curriculum to be changed so that personal finance related subjects are added. Officials believe that kids will benefit hugely by learning about money management and the problems that huge debt levels can create.

It has now been suggested that parents should also take responsibility for educating their children about personal finance matters whilst they are still young and likely to take in the information. For many it is too late by the time they leave college because they have already managed to get their hands on a credit card or other form of finance and started the debt ball rolling. Official want parents to tackle the issue sooner rather than later so that kids are able to make more informed financial choices as they get older.

It seems that parents are only too willing to do this because many are already trying to teach their kids about money, especially after seeing the huge problems debt has caused over recent years. As many as 78 percent of British parents are said to be keen to teach their kids about money issues.

One official said: “While parents themselves have made some changes to their financial and environmental behaviour since having children, they clearly feel an even stronger duty to pass these values on to their children.”

Tags: result, school, government, percent, behaviour

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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 worked while 195 went for one with a large number of branches.

More than one in ten still used the bank account their parents set up for them.

Over a third of those questioned said it is important to them that a bank places importance on issues such as the environment, human rights and sustainability.

Huw Davies, head of personal banking at Triodos, said: “The general public is feeling let down and disillusioned with the banking sector so it is not surprising that this many people struggle to find a reason to recommend their bank, and that there appears to be such high levels of dissatisfaction. With so many Brits feeling this way about the banks at the moment, we’d like to challenge people to turn this dissatisfaction into action.”

Some 37% said that they felt resentful towards their bank as a consequence of large staff bonuses and excessive profits. The survey was published after the chancellor George Osborne was accused of going easy on the banking sector and failing to introduce tighter regulation after the financial crisis. It was revealed yesterday that city funding to the Conservative party has doubled since David Cameron became leader.

The chancellor sought to dampen anti-bank sentiment when announcing levies on the sector earlier in the week: “The anger at the terrible mistakes of the banking industry, and the failure of those who regulated it, will long remain – and rightly so. But let us as a country confront this hard truth. Anger and retribution will not bring one percentage point of economic growth or create one single new job.

“The anger will remain. And we must never make the same mistakes again. But Britain needs to move from retribution to recovery.”

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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 money worries compared to just 20% of those aged over 65.

Steven Law, R3 president, said: “Since we last carried out the survey, people have seen a rise in the cost of living, from the VAT increase; to the rise of fuel and utility costs. This has happened against a backdrop of pay freezes, pay cuts and, in some cases, redundancies, so it is understandable that many are feeling pessimistic about their financial outlook.

“In my experience, most people’s debts become unmanageable due to a change in circumstance, such as sudden unemployment. This no doubt accounts for the generational split with regards to debt worries. In these uncertain times, for many of those of working age there is a real fear that if they do suddenly lose their job they will struggle to keep up with their debt repayments.”

Around 53% of respondents said they were worried about the amount of money outstanding on their credit cards. Overdraft facilities and mortgage repayments were shown to be troubling 27% and 25% respectively.

Some 25% of those questioned are currently saving less than they would under normal circumstances and just over a fifth say they are putting off big financial decisions.

An interest rate rise would cause problems for mortgage holders struggling with their monthly repayments with 28% of homeowners saying they could not afford an increase of £100.

Mr Law suggested that the findings might not solely be down to the current economic outlook and could be seasonally distorted: “Christmas is a time of heavy spending for many individuals so it is perhaps not surprising that the number of people concerned about their debts has increased since last quarter.

“Many people in Britain are already under pressure due to credit card debts, overdrafts and loans, and many have had to rely on these forms of credit to fund Christmas spending. This could explain why concerns about these types of debts have increased since previous quarters and why individuals have taken on more debts over the last few months.”

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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 a positive acceptance, or a payment that can be returned within a reasonable time period. Both options must be accompanied by prominently displayed risks and options. Companies must also provide more detailed information about the weight and carat of the gold they receive.

Heather Clayton, senior director of the OFT’s consumer group, said: “These days we see more and more new business models which involve consumers distance selling goods to firms. These options are good for consumers, providing business practices are fair. Where we see problems, however, we are keen to intervene early so that these markets develop with an appropriate level of consumer protection.

“Any companies operating similar business models must make sure they treat consumers properly and provide clear information on how the service operates so that people make informed decisions about whether they wish to part with their possessions.”

The OFT action was taken after an investigation was launched to establish whether online gold brokers were complying with consumer protection legislation. Unlike high street brokers, where customers can review and reject a deal whilst the gold is still in their possession, online services can send an immediate payment that needs to be rejected quickly if the customer thinks the price is too low and wants to get their gold back.

Research carried out last year by the consumer group Which? found that some online gold companies that advertise on television offered an average of 6% the gold’s retail value compared to 25% offered by high street pawn brokers and jewellers.

Peter Vicary-Smith, chief executive of Which?, said: “Our investigation found that they offered shocking value for money, and were consistently outbid by pawnbrokers and jewellers. Hopefully, the OFT’s intervention will make it possible for people to shop around for the best deal before selling their gold.”

A Cash4Gold spokesperson said: “We have, and will continue to be, clear with our customers as to what they should expect, and appreciate the OFT’s efforts to ensure our competitors adopt some of the same practices that have been part of our service offering from day one. Unlike some other gold buyers who shut up shop, we were pleased to work closely with the OFT to fully resolve all concerns.”

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