Where parents’ spending goes

Education, childcare and babysitting took the largest share of parents’ spending at £71,780 and £62,099 respectively. This is closely followed by food (£18,667), clothing (£10,781) and holidays (£15,532). The lowest spending for parents was for pocket money (£4,337), furniture (£3,373) and personal care (£1,143)

Spending starts from the day you are born

According to Aviva first-time UK parents spend more than £425 million each year preparing for the arrival of a first baby. This equates to £1,370 per family. The survey of 1,500 mums found that this was the average spend on essentials such as pushchair, baby clothes, cot, bedding, car seat and nappies as well as nursing chairs and mum-to-be treats. A quarter of parents pay £20,813 on moving to a new house to accommodate their growing family, while 27% spend £2,658 buying a new car.

It doesn’t just stop when you are 18

Research, by Scottish Widows, shows that a number of children are still relying on the bank of mum and dad into adulthood. It found that over 10 million adult children have formed a new ‘boomerang’ generation that return to their parents for handouts. This can include assistance with mortgage deposits and everyday living costs. The average spend for parents was £12,300 when this is taken as a whole it reaches a staggering figure of £55 billion.

If paying for the cost of raising your children has pushed you into the red, debt advice could help you find a way forward.

John Lewis

John has worked within the Debt Management side of the company since January 2009 having previously worked for the court service in the Probate and Magistrates service. Originally employed as a Customer Liaison Officer, John was promoted to manager of the group’s acquired brands within Debt Management in 2010. John is responsible for the running of our aquired brands customer service team and also the court work team, whose function is to assist and support Debt Management clients through the often complex and confusing CCJ process.

If this isn’t shocking enough, research by Credit Action found that average consumer borrowing hit a hefty £4,221 in January this year.

Taking control of your income and expenditure can be painless, particularly if you take heed of the following tips outlined in Standard Life’s ‘Financial Efficiency’ report.

It seems that 91% of Brits are actually taking charge of their finances to some extent, but only 57% actually confess to sticking to their household budgets. Below are some of the best money-saving tips gleaned from the study.

Get a bargain price

Consumers should never settle for the first price offered and always scour the internet and price comparison sites for the best deals online. 50% of respondents shopped around regularly (11% more than in 2009), while 49% regularly search out the best deals online (12% more people than three years ago). 27% also said they would consider reviewing their gas and electricity providers for a better deal, up from 25% in 2009.

Set a budget

30% of consumers argued that setting a budget was their best tactic for keeping a tight rein on their finances. This is up from 22% in 2009.

Use a spreadsheet or financial tools you can find on the internet to keep track of your spending. Ensure that you designate amounts for fixed payments, food/leisure costs and discretionary spending.

Put your savings away

26% of Brits believe that putting their savings in an ISA is the best way to ensure greater returns for their investments. ISAs allow savers to put away an annual, tax-free amount of £10,680, up to £5,340 of which can be in the form of cash.

Most ISAs also give you instant access so you can withdraw funds from your account at anytime.

John Lewis

John has worked within the Debt Management side of the company since January 2009 having previously worked for the court service in the Probate and Magistrates service. Originally employed as a Customer Liaison Officer, John was promoted to manager of the group’s acquired brands within Debt Management in 2010. John is responsible for the running of our aquired brands customer service team and also the court work team, whose function is to assist and support Debt Management clients through the often complex and confusing CCJ process.

The latest figures from The UK Card Association found that fraud levels have fallen to a ten-year low and this is largely due to an improvement in credit and debt card security.

Over the last three years, fraud losses on UK cards fell by a significant 45%. Online banking has also seen a reduction in money lost through fraud, from £46.6 million in 2010 to £35.4 million last year.

Despite efforts to keep fraud at bay, the number of telephone scams increased by a massive 32% between 2010 and 2011.

Cheque fraud also increased over the same period, by 17%. Fraudsters are stealing genuine cheques and altering the payee name or user details from genuine cheques to create counterparts.

DCI Paul Barnard who heads up the industry-sponsored police squad, the Dedicated Cheque and Plastic Crime Unit, commented: “As technological advances have made our payments more secure, we’ve seen a spike in more simplistic crimes.”

Criminals are using fake email addresses and fooling consumers into handing over their security details, as DCI Barnard explained: “Many scams involve customers being conned into handing over their cards and PINs, or their telephone banking security details by someone calling, pretending to be their bank or police.”

Melanie Johnson, Chair of The UK Card Association, believes that more consumers are actively protecting their finances: “Customers have played their part in driving down losses by taking heed of advice about looking after their personal and financial details,“ she said.

“Fortunately, they can always be confident that if they are the innocent victim of fraud, they have excellent fraud protection that they don’t get if they use cash.”

John Lewis

John has worked within the Debt Management side of the company since January 2009 having previously worked for the court service in the Probate and Magistrates service. Originally employed as a Customer Liaison Officer, John was promoted to manager of the group’s acquired brands within Debt Management in 2010. John is responsible for the running of our aquired brands customer service team and also the court work team, whose function is to assist and support Debt Management clients through the often complex and confusing CCJ process.

According to The Council of Mortgage Lenders (CML), the number of mortgage borrowers in negative equity was estimated at figures of 827,000 in late 2011.

Homeowners who purchased their properties with 100% mortgages when the market was at its most buoyant have seen the value of their property slashed to 60%.

Paul Smee, CML Director General, cited some of the reasons why families and individuals fall into negative equity:

“What typically causes difficulty for households is not a nominal fall in housing value but an unexpected change in personal circumstances, like the loss of a job or the breakdown of a family relationship.”

Recent figures also produced by CML show that gross mortgage lending reached a figure of £10.5bn in January 2012, a 10% increase compared to the same time last year.

CML’s Chief Economist Bob Pannell warned that even though figures for lending are up, the property market could contract over the coming year.

“The recent improvement in the housing and mortgage market sentiment is welcome,” said CML.

“But we should be careful not to overstate its significance, given the very low levels of activity we are starting from and the protracted and difficult economic rebalancing that the UK and other countries have embarked upon.”

This news may see first-time buyers, who are rushing to snap up property before the free stamp duty deadline, setting themselves up for negative equity.

In 2011, the FSA announced plans to help those who’d become ‘mortgage prisoners’ by allowing lenders to offer more financial assistance to those who have borrowed most for their homes.

Are you living with the threat of negative equity?

If you failed to put a large enough deposit down for your property or the value of your home has depreciated significantly, you could be facing a negative equity situation.

Debt advice by a reputable debt management company could help you to find a way of dealing with the issue.

John Lewis

John has worked within the Debt Management side of the company since January 2009 having previously worked for the court service in the Probate and Magistrates service. Originally employed as a Customer Liaison Officer, John was promoted to manager of the group’s acquired brands within Debt Management in 2010. John is responsible for the running of our aquired brands customer service team and also the court work team, whose function is to assist and support Debt Management clients through the often complex and confusing CCJ process.

The cost of raising children and caring for them is becoming increasingly hard for parents under the current economic climate.

Shockingly, one in five mums will go hungry in the UK to make sure their kids have enough food.

New research from mumsnet.com, the online parenting website, also found that one in four families is currently living on credit cards as a result of family budgets being squeezed.

Despite parents going without; the child poverty rate continues to rise.

Figures from action group, End Child Poverty, show that 30% of children in Britain are living in poverty.

Worryingly, parts of London and Manchester have the highest levels of child poverty in the country. Nearly 50% of children living in these areas are in poverty.

The London boroughs of Bethnal Green and Bow have the highest rate of child poverty in the country, with 51% of children living below the poverty line.

Manchester Central comes in a close in second with 49% of children living in poverty in the borough.

Throughout the UK, one in five children is classified as below the poverty line before housing costs. In Manchester, London and 19 other parliamentary constituencies, at least four in ten children are living in poverty.

Liverpool, Nottingham, Leeds, Glasgow and Birmingham are just a few of the other parts of the country where more than 39% of children are living in poverty.

The Prime Minister’s Constituency of Witney in Oxfordshire has one of the lowest child poverty records, with a figure of just 7%.

Alison Garnham, Executive Director of the Campaign, commented; “The child poverty map paints a stark picture of a socially segregated Britain where the life chances of millions of children are damaged by poverty and inequality. But it also gives us reason for hope.”

The Institute for Fiscal Studies suggests that child poverty will rise by 400,000 by 2015. As households become increasingly stretched, many find themselves in debt. If you are concerned about your debt levels, a debt management scheme could help.

John Lewis

John has worked within the Debt Management side of the company since January 2009 having previously worked for the court service in the Probate and Magistrates service. Originally employed as a Customer Liaison Officer, John was promoted to manager of the group’s acquired brands within Debt Management in 2010. John is responsible for the running of our aquired brands customer service team and also the court work team, whose function is to assist and support Debt Management clients through the often complex and confusing CCJ process.

According to a report by Scottish Widows, only 51% of the UK workforce is saving the correct figure needed to afford them a comfortable pension.

In order for current employees to get the annual retirement income of £24,300, a figure that is desired by this group on average, they will need to start putting aside a monthly amount as soon as possible;

Ian Naismith of Scottish Widows said: “Put simply, people need to save an extra £58 per month on average to prepare adequately for retirement and make up the shortfall we are seeing currently. That is roughly the cost of a cup of coffee every day.

“Even though for many this is realistic, and is in under the average £97.10 per month people say they can afford, we appreciate the difficulty in setting aside extra money.”

The government’s latest series of quantitative easing measures to boost the UK’s ailing economy could mean that pensioners have to look at extra savings measures or face being ‘permanently poorer’.

Joanne Segars, Chief Executive of the National Association of Pension Funds, said; “This short-term stimulus is leaving pensioners and pension funds in long-term pain.

“People who are retiring now are finding that annuity rates have been squashed by QE.

“Retirees who get locked into a weak annuity will find that the Bank’s money-printing leaves them out of pocket for the rest of their lives.”

Experts have calculated that a pension of £100,000 would secure annual income of £15,640 a year, post-65, 20 years ago. The same figure would now only generate an annual income of £5,800.

The government has recently launched a multi-million pound campaign to urge people to save more for their pensions.

Debt issues

Debt management plans can involve making single monthly payments and ending creditor hassle.

If you think you may need to consider a debt management plan or find alternative debt solutions, ClearStart could help.

John Lewis

John has worked within the Debt Management side of the company since January 2009 having previously worked for the court service in the Probate and Magistrates service. Originally employed as a Customer Liaison Officer, John was promoted to manager of the group’s acquired brands within Debt Management in 2010. John is responsible for the running of our aquired brands customer service team and also the court work team, whose function is to assist and support Debt Management clients through the often complex and confusing CCJ process.

According to an article published in leading broadsheet The Telegraph in 2008, the average cost of a divorce was £28,000. Although this figure may seem inordinately high considering that court fees amount to just £347, there are a range of other payments that need to be factored in such as solicitors’ fees and settlements.

The financial impact that divorce has on couples was emphasised by a Norwich Union report which found that 50% of divorcees have no choice but to make a dent into personal savings accounts in order to foot their divorce bills.

For those ‘soon-to-be divorcees’ who want to carry out the process on a post-credit crunch budget, there are a number of DIY options available. From as little as £37 you can download all the forms and documents needed to complete the divorce process.

However, even online providers of so called ‘quickie’ divorces admit that their clients may need to seek a consultation with a solicitor as a supplement to the divorce packages that they offer. Mark Keenan, the Managing Director of Divorce Online said;

“We’re the end of the process, not the beginning. We recommend that people seek advice from solicitors, then once they’ve decided how to deal with their finances, children and other issues, come to us for the uncontested divorce. We can’t give advice, and if someone comes to us still needing advice we will try to find somewhere suitable to provide it.”

Another invaluable cost saving measure in the divorce process is taking up mediation to iron out issues between a warring couple.  From April 6 2011, the government introduced a measure that would see all divorcing and separating couples being referred to mediation before being able to bring their cases to court.

John Lewis

John has worked within the Debt Management side of the company since January 2009 having previously worked for the court service in the Probate and Magistrates service. Originally employed as a Customer Liaison Officer, John was promoted to manager of the group’s acquired brands within Debt Management in 2010. John is responsible for the running of our aquired brands customer service team and also the court work team, whose function is to assist and support Debt Management clients through the often complex and confusing CCJ process.

The figure represents the lowest rate in history and is part of a series of measures designed to avert the UK from entering a double-dip recession.

“The decision to leave the Base Rate unchanged at 0.5% and to announce a further round of Quantitative Easing was widely anticipated across the market,” said Chris Parrish, Group Treasurer at Yorkshire Building Society.

The announcement comes in the wake of the Bank of England’s decision to carry out Quantitative Easing that will see a further £50 billion injected into the UK economy. The £50 billion forms part of the £325 billion pumped into the ailing British economy by the Bank of England over several years.

Although inflation rates have reduced from their September high to 4.2% in December last year, the rate of inflation has still failed to hit its 2% target, leaving the Bank of England with little choice but to ‘freeze’ the 0.5% base rate figure.

Simon Rose, from Independent Action Group Save Our Savers, criticised the Bank of England’s rescue package:

“The Bank of England has already conjured up £275 billion out of thin air to push gilt and bond interest rates down, but there is precious little proof that this money is having the desired effect”.

“Throwing more money at the problem will have only one effect, it will stoke up inflation and impoverish pensioners and savers,” he added.

Chris Parrish, Group Treasurer at Yorkshire Building Society, warned that worldwide financial crisis may leave the Bank of England’s base rate at its current figure for months to come:

“The UK economy remains weak and potentially on the brink of another recession as it attempts to manage the effects of the Euro-zone crisis and the mounting national debt and this is likely to suppress any rise in Base Rate to the back end of 2012 at the earliest.”

John Lewis

John has worked within the Debt Management side of the company since January 2009 having previously worked for the court service in the Probate and Magistrates service. Originally employed as a Customer Liaison Officer, John was promoted to manager of the group’s acquired brands within Debt Management in 2010. John is responsible for the running of our aquired brands customer service team and also the court work team, whose function is to assist and support Debt Management clients through the often complex and confusing CCJ process.

Angel Delight and Paxo stuffing are just a few of the family favourites that are facing the axe as one of Britain’s biggest domestic food producers is struggling to cope with its massive £1 billion debt mountain.

Premier Foods recently announced that they are cutting 600 jobs in an effort to save costs. The food group hopes to double its saving target of £20 million to £40 million by as soon as 2013.

The food giant owns some of Britain’s best loved products such as Mr Kipling, Ambrosia, Bisto, Hovis, Smash and Marvel.

The company has suffered profit losses and there is some uncertainty surrounding which brands will be sold off.

Whilst the company has embarked on a new advertising campaign for some of its ‘power brands’, including Lyod Grossman and Sharwoods, they will need to do more to keep the banks at bay.

Premier Foods is not the only company struggling under the weight of the current economic climate.

Retailer Peacocks has fallen into administration after mounting debt problems. The company had outstanding debts of up to £705 million which exceeds it turnover of £700 million.

Kodak, which has been in business for 133 years, filed for bankruptcy recently as it struggled to keep up with competitors.

The American company, which invented the hand-held camera, could not keep up with the demands of the digital age and moved into making printers and other photography related products. However, this was not enough to keep the company afloat.

“Since 2008, despite Kodak’s best efforts, restructuring costs and recessionary forces have continued to negatively impact the company’s liquidity position,” Kodak’s Chief Financial Officer, Antoinette P. McCorvey, said in a court whilst filing for bankruptcy on behalf of the company.

Filling for bankruptcy can be a stressful and difficult experience. If you fear that your debt levels are so high this could happen to you, it is important to note there are many options. Depending on your financial situation, you could qualify for an Individual Involuntary Arrangement or apply for a debt management scheme.

John Lewis

John has worked within the Debt Management side of the company since January 2009 having previously worked for the court service in the Probate and Magistrates service. Originally employed as a Customer Liaison Officer, John was promoted to manager of the group’s acquired brands within Debt Management in 2010. John is responsible for the running of our aquired brands customer service team and also the court work team, whose function is to assist and support Debt Management clients through the often complex and confusing CCJ process.

Shockingly, at least 2.5 million people are currently behind on at least one bill payment, with millions more in the red.

As many as ten million Brits battle with their debts on a daily basis, living in a “constant struggle” according to research from the University of Nottingham for the debt charity, Money Advice Trust.

The research found that around 20% of the UK adult population faces serious debt problems.

With unemployment rising and wage growth relatively flat, whilst prices are going up, it’s going to take a greater proportion of household income to heat your home, put food on your table and petrol in your car, “ said Joanna Elson, OBE, Chief Executive of the Money Advice Trust.

“In short, day-to-day living will take up more and more of your money, which can make it hard to pay the bills,” she added.

The credit crunch which began in 2007 has caused millions to plummet into debt. A large number of Brits lost their jobs/homes and spiraled ‘into the red’ as a result.

As wage freezes thaw out slowly, many are struggling to cope against the tidal wave of inflation with their falling ‘real’ value wages.

This has had a huge impact on the cost of living, with millions being unable afford the high price of everyday expenses and increasingly relying on credit to make ends meet.

Would-be property buyers’ savings are being drained as the cost of rent reached a record high last year. Those who do have mortgage debt and cannot afford to make monthly repayments have even turned to payday loans as a result.

Debt Management

If you are finding your personal finances and mounting debt to be a ‘constant struggle’, you could potentially find a suitable debt management solution with ClearStart.

John Lewis

John has worked within the Debt Management side of the company since January 2009 having previously worked for the court service in the Probate and Magistrates service. Originally employed as a Customer Liaison Officer, John was promoted to manager of the group’s acquired brands within Debt Management in 2010. John is responsible for the running of our aquired brands customer service team and also the court work team, whose function is to assist and support Debt Management clients through the often complex and confusing CCJ process.