Consumer confidence dropped in June amid debt concerns

Consumer confidence dropped in June, according to the latest surveys, as people worried about the effects of rising inflation, low wage increases on their finances, and existing debt management problems.

According to this month’s GfK NOP consumer confidence survey, the index for consumer confidence fell by around four points to -25. This reading is believed to be the lowest it has been since January 2011, and it is much lower than the average level of -8. Even in May 2011, consumer confidence was at -21.

The survey also revealed that less consumers think that now is a good time to start saving, as well as for making major purchases. This was supported by the savings index, which is five points lower compared to the same time last year, and by recent data released by the Office for National Statistics. The ONS revealed that savings levels have dropped this year, with families having no spare cash to put aside after paying bills, meeting monthly expenses and tackling debt problems.

Howard Archer, UK & European Chief  Economist for IHS Global Insight, commented on the recent findings, saying:

“All components of the consumer confidence index saw deterioration in June, with consumers more pessimistic about the outlook for the economy for the next 12 months and its performance over the past year.

“The renewed drop in consumer confidence in June reinforces belief that consumers will be very cautious in their spending over the coming months as their purchasing power remains under severe pressure from high inflation, low wage growth and tighter fiscal policy.”

View the original article here

Read more »

Posted in: concerns,confidence,Consumer,dropped

Man caught breaking bankruptcy agreement by running business

A man from Caythorpe in Lincolnshire has been caught running a business even though it breaks the terms of his bankruptcy agreement.

Martin Coaley, 55, declared bankruptcy after his businesses, Badger Commissioning Ltd, failed in January 2002. However, he became the sole director of another company, Badger Consulting Ltd, five years later, even though he was still an undischarged bankrupt who was banned from running any business venture. He took control of the company after his mother resigned her position as director.

Mr Coaley ran the second company for two years before it went into administration with tax debt problems of around £24,000. HM Revenue and Customs investigated Badger Consulting Ltd and found that record keeping was extremely lax at the company and that there was at least £54,000 in income that was unaccounted for.

In August 2010, Mr Coaley was banned for running any kind of company for at least nine years. At a recent hearing at Lincoln Crown Court, he admitted the charges made against him. These included acting as a director whilst an undischarged bankrupt, failing to keep accurate financial records and neglecting to give all of the necessary information to the receiver.

At the hearing, recorder Christopher Goodchild said to Mr Coaley:

“You are no doubt extremely good at your job but as a businessman you are useless.”

Mr Coaley was given a two-year community order including supervision for his misconduct, as well as being ordered to complete 100 hours of unpaid work.

View the original article here

Read more »

Posted in: Agreement,Bankruptcy,Breaking,business,caught,running

1.2m people could face debt problems due to HMRC tax error

As many as 1.2 million people could be facing debt problems as HM Revenue and Customs (HMRC) reveals that there have been errors with the Pay As You Earn (PAYE) tax system.

An internal audit into the PAYE system has uncovered a long list of wrong payments, with as many as five million people having paid either too much or too little tax on their earnings in 2010-11. Whilst a lot of people may receive tax rebates because of the error, a total of 1.2 million are believed to have underpaid by as much as £600 in the tax year ending April 2011.

To address the shortfall, it is likely that most of those who owe money will have £50 a month deducted from their pay until they are in the clear. This could lead to debt problems for those who are already struggling to make ends due to rising inflation and low wage increases.

HMRC is also planning to be less lenient on those who owe money than it has been in previous years. In 2010, the government department agree to not to pursue those who owed less than £300, whereas this year it will be chasing up unpaid tax of more than £50.

Accountancy firm Grant Thornton, which released the figures, expressed concern that the HMRC’s tougher tax debt recovery methods could affect elderly people more than others. Accountant Mike Warburton said:

“I have a particular concern about pensioners, not simply because many would find it difficult to pay the tax, but because they are often caught with underpayments.”

View the original article here

Read more »

Posted in: could,error,people,problems

Real Housewives’ star Sonja Morgan faces losing her home over bankruptcy

Despite starring in hit US TV show Real Housewives of New York, the reality star Sonja Morgan has revealed that she could lose her home after declaring bankruptcy and fighting a divorce settlement battle with her former husband.

Morgan first spoke of her financial woes during episodes of Season 4 of the popular Real Housewives series. Last month, viewers watched the 47-year-old confess to her friends and fellow housewives that she had filed for bankruptcy after racking up debt problems of $19 million.

According to a report in the New York Post, Morgan’s debt problems began in 2006 when she agreed to finance a film but then reneged on the deal as she had just been served with divorce papers. She was successfully sued by the production company and in September 2009, a Californian federal jury ordered Morgan to pay out $7.06 million in damages.

The mother of one is now facing further money troubles as she battles her former husband, the 80-year-old millionaire John Adams Morgan, over a divorce settlement of $3 million. Morgan has now revealed that she faces losing her $6 million home in New York as a result of her debt problems.

Morgan has told the New York Post that she is banned from visiting properties that she co-owns with her former husband, whilst he himself lives on a $19 million private island near Connecticut. She said:

“I’m sure the world thinks, ‘Sonja doesn’t have to worry, she’s got that husband there for her’, but I’m on my own.”

View the original article here

Read more »

Posted in: Bankruptcy,faces,Housewives,losing,Morgan,Sonja

Property developer Ken Campbell avoids bankruptcy with IVA

The property developer Ken Campbell has reportedly applied for an individual voluntary arrangement (IVA) in order to stave off bankruptcy.

Whilst the full extent of Campbell’s debt management problems has not been revealed, his financial situation is believed to be so dire that he is fighting off bankruptcy. In order to do so, Campbell has taken the IVA option, in which a portion of his debt will be written off and his outstanding debt will be gradually repaid.

As part of the agreement, Campbell will see 63 per cent of his debt written off as he has agreed to pay his creditors 37p for every pound he owes them, provided of course that they accept his offer.

According to BBC News, a letter has been sent to Campbell’s creditors, in which it states that if they reject the offer and the property developer goes through bankruptcy, they may end up with nothing. Also included in the letter is a proposal to “wind down” Campbell’s construction business, which should help the debtor recover some funds. The creditors are set to vote on Campbell’s offer at the end of the month.

Campbell is perhaps best known for lending £25,000 to controversial Northern Ireland Unionist politician and First Minister’s wife Iris Robinson during the scandal of her extra-marital affair with a 19-year-old man.

The loan was reportedly sought so that Robinson could help her young paramour launch a business venture. However, it is not believed that this loan has contributed in any way to Campbell’s financial problems, as his solicitor has confirmed that most of the debt has since been repaid.

View the original article here

Read more »

Posted in: avoids,Bankruptcy,Campbell,developer,Property

Many could be in debt to tax man

It has been announced recently that once again HM Revenue & Customs is planning to send out letters to millions of people over the course of this summer in a similar operation to the controversial and embarrassing one that was carried out last year. In 2010 HMRC had to contact millions of people either to repay tax that had been overpaid or to demand underpaid tax. This followed errors that the tax office blamed on its computer systems.

However, it has now emerged that nearly five million people may have paid the wrong tax in 2010/2011, which means that another round of letters will have to be sent out informing millions of people whether they are owed money by the tax office of whether they owe money to the taxman. Whilst those that are owed money could be in line for a nice little windfall of several hundred pounds, the situation could be very worrying for those that are contacted to say that they owe money to the taxman.

According to reports around 1.2 million people underpaid tax by an average £600 in the last financial year due to HMRC miscalculations. For these people the repayments will have to be made via a change in their PAYE codes that will see them lose an average £50 a month on their wages until the debt has been paid. However, like last year the move is likely to cause uproar amongst those that are being forced to pay money that they didn’t even realise they owed. Some of the people who owe money may have even retired since last year.

One official said: “I have a particular concern about pensioners, not simply because many would find it difficult to pay the tax, but because they are often caught with underpayments. When they start to draw the basic state pension, many continue to have their full personal allowances attributed by mistake against other sources. It is therefore quite easy to run up an underpayment of more than £1,000 a year.”

Tags: uproar, Social Issues, underpaid tax, Low Income Taxpayers, HMRC, Taxation, PAYE

Filed under: News

Like this post? Subscribe to my RSS feed and get loads more!

View the original article here

Read more »

Posted in: could

Students face bleak debt ridden futures

As many people know from personal experience, being a student these days can be a costly affair, with many of those that are keen to get a further education to improve their job prospects having to put themselves in huge amounts of debt for the privilege. Whilst in years gone by students could justify getting into this amount of debt because of the improved job prospects that their advanced education would give them the students of today are having to face a double whammy of getting into a lot of debt and still having bleak prospects when it comes to jobs.

Research that was published recently indicated that many graduates face a bleak future, bogged down with a load of debt that they have had to take on to get their further education and affected by bleak job prospects despite having an advanced education. The data showed that it now takes an average eleven years for students to clear their debts after leaving university. On top of this, nearly 40 percent of students have been forced to put their lives on hold as a result of these high debt levels.

The research was carried out by uswitch.com with the results showing that close to 60 percent of students had been unable to save money because of their debts and nearly 50 percent had been forced to put off buying a home, further pushing up the average age of the first time buyer in today’s market. Over 30 percent had been unable to start a pension when they wanted to and nearly 30 percent had delayed plans for marriage.

One personal finance expert said: “The fact that graduates have to put their life on hold because they are knee deep in student debt is a sorry state of affairs. And as fees go up, students risk running up even bigger debts. But without a degree, getting a job in today’s stagnant market may be even harder.”

Tags: jobs, Student, Financial Services, s market, high debt levels, education, research, first time buyer

Filed under: News

Like this post? Subscribe to my RSS feed and get loads more!

View the original article here

Read more »

Posted in: bleak,futures,ridden,Students