Posts Tagged ‘Debt Problems’

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UK consumers not aware of financial products

Tuesday, August 10th, 2010

A recent survey by comparison site Confused.com has thrown up some startling results, one of them being that consumers in the UK are confused by financial products, do not read the finer print or understand the hidden costs before applying for one. This is one reason why many of them require a debt management plan in the near future.

The survey took into consideration 6,000 UK consumers and found that 71.9 per cent of people do not know how to use their money wisely. Another 38 per cent of consumers could not estimate how much their fuel bills would be and 42 per cent claimed that having to make decisions about money caused them to stay awake at night.

A further 79.1 per cent said that mortgages were confusing and 83.9 per cent stated that they did not fully understand pensions.

This could lead people to seek a debt management plan when they retire as they may not have enough knowledge on putting money aside to see them through a comfortable old age.

Darren Black from confused.com said: “It’s not surprising that financial products and terms account for so much confusion in modern life, especially given the changes that have taken place in the sector over the last couple of years.”

Only last week, moneysupermarket.com had revealed that a third of savers had never checked the rates on their accounts, implying they were missing out on the best deals.

Going by the recent reports, the number of people in debt is showing a steep rise notwithstanding the fact the economy has started showing signs of revival. Not knowing about the financial products you buy can easily lead you into debt. If you are already in debt, you can seek free debt advice about different debt solutions including an IVA and to understand how you can take control over your finances.

As always, we are here to help you if you are struggling so don’t hesitate to contact us if you would like help or advice.

Have a pleasant week.

Nigel

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Home repossessions can reach 175,000 by 2012

Wednesday, August 4th, 2010

Welcome to my weekly blog and I hope you are all keeping well. This week, I’m going to look at a topic that is close to the heart of many people struggling with debt problems and that is the fear of losing their home.

According to an unpublished report, home repossessions in the UK could reach 175,000 by 2012. The report commissioned by the Department for Communities and Local Government last year, was compiled when the economy was in a much worse state than now.

The Council of Mortgage Lenders says that there were 47,700 repossessions last year. For this year, it’s predicting not more than 53,000 repossessions.

The drop in the figures can directly be attributed to the fact that the economy is rising from the recession. However the drop in the numbers predicted this year does not mean that repossession is not a serious problem. If 53,000 homes are taken back this year, it means that more than 1,000 households a week will be affected. This further means thousands of people will be left homeless and this by no means is a small figure.

If you are behind with your home loan, remember that by taking measures now you can ensure that your home remains safe. One measure that you should immediately take is to seek debt advice. If you are worried about further costs, there are  a number of companies that will provide debt advice for free and it can throw light on the various debt management plans and debt solutions available that can help you get hold of your debt situation before it spirals out of control.

You can consult a number of debt management companies for free debt advice to study the range of options available. Based on the information you receive, you can then decide to opt for a debt management solution that best meets your circumstances.

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North East UK more in need of debt management

Tuesday, July 27th, 2010

A new research shows that the North East of the country may be more in need of debt management such as Individual Voluntary Arrangements and Debt Relief Orders to deal with debt problems.

The bankruptcy map of the UK was compiled by R3, the insolvency trade body. The results of the study show that the likelihood of becoming insolvent is almost seventy percent (69.5%) higher in the North East than in London.

Commenting on the findings, R3’s President, Steven Law said, “Prior to the recession, the North East had a higher than average unemployment rate and the region’s construction industry was badly hit during the economic downturn so it is understandable that personal insolvencies are more common there.”

There were almost six thousand (5,923) new personal insolvency cases in the North East, which means that for every ten thousand people, 29 of them became insolvent. The figures indicate that people who live in London are least likely to go into a formal insolvency procedure.

A further analysis of the insolvency figures show that recession has hit men harder than women, with a rising number of men seeking debt advice to get on track. According to the Consumer Credit Counselling Service (CCCS) report, there was a 51 percent increase in the number of men seeking debt advice since 2007. Factors such as rising unemployment, a slower rate of salary increases and rising household expenditure combined took toll on men’s financial status.

The top ten insolvency regions (new personal insolvency cases per 10,000) according to the report by R3 are:  

1.    Torbay, South West (45.8)

2.    Kingston upon Hull, Yorkshire and the Humber (40.7)

3.    Lincoln, East Midlands (39)

4.    Plymouth, South West (38.8)

5.    North Tyneside, North East (37.4)

6.    Gateshead, North East (37.1)

7.    Corby, East Midlands (37)

8.    Hastings, South East (36.9)

9.    West Devon, South West (36.9)

10.    Thurrock, East Anglia (36.7)

An effective debt management can help you control your debt and improve your financial situation, but before settling for a specific debt solution, it is always advisable to seek professional debt advice to explore your options.

I hope you have found my blog useful and enjoy the rest of the week. Lets hope the rain goes away first!

Nigel

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New mothers forced to go back to work to deal with mounting debt

Wednesday, July 7th, 2010

Welcome to my weekly blog and I hope you all are having a nice summer and enjoying the World Cup – now from a neutral point of view!

A recent study reveals that more than half of new mothers return to work due to financial pressures, with many cutting their maternity leaves. According to the survey, 56% women admitted they were unprepared for the fiscal impact of having a child. The survey was conducted by the comparison website uSwitch.

The study paints an image which is a stark contrast to that of modern mothers “having it all”. More than half (52%) of those returning to work after the birth of a child do so because of debt problems.

These are some of the highlights of the study:

  • Only 22% women choose to return because they want to continue their career.
  • The average net household income drops by 34% from £3,431 to £2,266 a month while on statutory maternity pay. However, costs soar, with parents spending an average of £2,152 in the run up to the birth on baby items, and a further £2,521 – more than a month’s reduced net household income – after the baby is born.
  • The average amount saved in anticipation of having a baby is £3,265, but 56% of the 1,000 mums questioned for the survey said they were not fully prepared for the impact of surviving on a reduced income.
  • Nearly a third of new mums were not aware of their company’s maternity package when they decided to have a baby.
  • More than four in 10 mums have ended up in debt while on maternity leave, incurring an average of £1,329.

Ann Robinson, consumer policy director at uSwitch, said: “Debt and financial considerations combine to be the biggest motivating factor behind new mothers returning to the workplace. Despite women being told that they can ‘have it all’ and can choose whether to be a working or stay-at-home mum, the fact is that most have this choice stripped away from them by the financial realities of modern life.

With the new government planning to cut child trust funds and the impending budget causing concerns over pay freezes and redundancies, family finances are under more pressure than ever. The high cost of living coupled with the often crippling cost of a mortgage means that many households today need two incomes to get by. Unfortunately, new mothers are often paying the price for this by seeing their choices taken away.”

I always stress the importance of seeking impartial and good debt advice. It is the first and often the most difficult step to take but it is also the most important. If you are worried and are struggling, act now.

Thanks

Nigel

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CAB: Additional 2.4 million people sought debt advice in 2009

Tuesday, June 22nd, 2010

Welcome to the latest edition of my blog.  According to the latest annual statistics from the Citizens Advice Bureau (CAB), an additional 2.4 million enquiries for debt advice were received by its call centres in 2009 compared to 2008.

The CAB report shows that of all the calls they received, 34 percent were from people who sought debt advice. In fact, debt advice was the largest topic of advice sought by CAB callers.

The report further shows that compared to the previous year the debts owed to private bailiffs increased by 38 per cent. A total of 19,090 enquiries regarding private bailiffs were made compared to 13,845 the previous year.

Chief Executive of the CAB, David Harker said “We know from our frontline that the human impact of the recession is far from over for people who have lost their job or their home, or both, in the past two years. Yet, there are millions more people struggling with debt and poverty, or missing out on welfare benefits, that Citizens Advice Bureau want to be able to assist.”

Between April 2009 and March 2010 the CAB provided advice on 7.1 million issues which is an increase of 18 per cent on the previous year. Enquiries regarding mortgage and secured loan arrears also increased by 21 per cent over the same period.

David Harker further said, “We were able to help more people last year thanks to some generous additional funding from the government and many local councils. However much of this was short term, and our network of community based services, which rely on the generous help of 21,000 volunteers, may not be able to help as many people in future if funding is cut. It is absolutely vital that we are able to continue to provide the invaluable service we deliver to local communities without risk of major cuts.”

If government cuts are carried out people will still need professional debt advice to help them find a solution based on their personal financial circumstances. Aside from the Citizen Bureau, there are many debt management companies in the UK that are providing free debt advice. If you are in debt, it is important to get reliable, helpful and free debt advice at the earliest.

We ClearStart understand how stressful debt can be and we offer advice on all debt solutions including IVA (Individual Voluntary Arrangement), specific to your needs. Remember, advice should always be in your best interest.

Thanks

Nigel

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Tax rise could mean debt trouble for over-55s

Monday, June 14th, 2010

Tax rise could mean debt trouble for over-55s

Welcome to the latest edition of my blog. The focus this week is on tax rises and in particular the effect it will have on people approaching retirement. A recent suggests that people in the over-55s age bracket are more worried about the impact of tax rises on their day-to-day spending and also on their debt management. Needless, to say the worry is adversely affecting their health also.

The study, which was conducted by Aviva, reveals that one in five people aged over 55 are worried about getting into debt or managing their existing debt as also about the rising cost of living.

The study shows that almost two-thirds (64 per cent) are worried by the possibility of rises in taxation over the coming five years. These fears are the highest amongst those who have just retired amounting to 68 per cent of 65 to 74-year-olds surveyed.

Debt management capabilities of the people have already been hit by the recent economic turbulence. People whose pensions were linked to the stock market between 2008 and 2010 are likely to have witnessed their income drop due to the impact of the recession on share prices around the world. A further rise in taxation would adversely affect their retirement savings for paying off mortgages and other debts.

For people in this age group, it is imperative that they seek debt advice immediately. Most reputed debt management companies in the UK offer free debt advice. Talk to their counsellors in confidence about your debt and they will recommend debt solutions that are tailored to your circumstances. However, as a note of caution it is also important to point out that some companies may not provide you impartial advice. This is because they are backed by certain lenders and so selling their solutions would mean a better commission for them. To play it safe, it is better that you consult more than one company to study the range of debt solutions available.

If Browse through our website and you will find information about the different Debt Solutions available in UK including Debt Management Plans (DMP), Individual Voluntary Arrangement (IVA), Bankruptcy and how to avoid bankruptcy.

I hope you have a nice week and if you’re a football fan like myself, then enjoy the World Cup.

Thanks

Nigel

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Average household in Britain owes £57,950 in debt

Friday, June 4th, 2010

Another day goes by and the nation sees itself further in debt. According to the latest figures, the collective debt of personal debts in Britain amounts to £1,460bn, which means as individuals, people owe more than what the whole country produces in a year.

A more disturbing fact is that the debt problem is only getting worse. The figures for March 2010 show that personal debt further increased by £0.6bn. The interest payments on that debt were £67.8bn in the last year alone. What this means is that the average household now owes £57,950 while the average amount owed by every UK adult is £30,258. Further, the average interest being paid by each household on their debt is about £2,692 each year while £186m-worth of personal interest is paid out each day in the UK.

Apart from mortgages, people also owe an increasing amount on plastic and loans. Studies show that the average consumer borrowing through overdrafts, credit cards, motor and retail finance deals and unsecured personal loans went up to £4,593 per average UK adult at the end of March 2010. Also, a property is repossessed every 11.4 minutes and someone is declared insolvent or bankrupt every 3.69 minutes.

There are various reasons that have contributed to this. The ‘buy now and pay later’ concept is definitely to blame but added to this is the fact that many people have lost their jobs during the recession. Also, the earnings too have taken a nosedive. As a result, people are now in a situation when they are unable to make their monthly payments.

Disturbing as this may sound, what is important to remember is that a bad debt situation can come under control provided you explore all options available. If you are facing serious debt, the first step you should take is to seek debt advice. Most reputed debt management companies in the UK offer debt advice for free. The experts will study your individual situation and suggest whether an informal debt management plan, a debt consolidation loan, or an IVA will help you on the path of recovery or else if everything else fails, you can declare bankruptcy. Seeking debt advice can also help you to understand preventive measures you can take to avoid falling into the debt trap.

I hope you enjoy the weekend and weather and long may it last!

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Unnecessary stigma hinders people in the UK from seeking debt management help

Monday, April 26th, 2010

Welcome to the latest edition of my blog and I hope you all had a lovely weekend.

The focus of this weeks posting is on the stigma associated with debt.

New research from R3, the insolvency trade body, shows that there is still unnecessary stigma attached to seeking debt help and as result people who do not take debt management options well on time, sink deeper into the debt trap.

The latest figures from R3 reveal that 30 per cent of people who face financial trouble do not even inform their immediate family about it. The study further reveals that 19 per cent of people cannot face opening their bills at the end of the month.

The research adequately highlights the fact that this unnecessary embarrassment and fear is hindering people from accessing appropriate debt management advice and as a result they are letting their amount of debt accumulate.

Labelling this as a “damming spiral of personal debt,” R3 President Peter Sargent commented, “even after a long recession people are still terrified to ‘own up’ to debt problems. Yet this ultimately makes the issue worse – we know there is a group who are not addressing their financial problems and can’t even come clean to partners or family about them.”

He further revealed that 21 per cent of those struggling with debts did not know where to turn for financial help, despite the plethora of debt management companies available to lend support to consumers.

Another interesting finding of the report was that 90 percent of those facing hardship felt that money management should become part of the school curriculum.

Meanwhile, a poll of 3,000 people conducted by a financial services website yesterday shows that the average person now holds personal debts in excess of £6,000. This further highlights the need for debt management plans.

As always, help is on hand if you are struggling with debts and as previously mentioned in this blog, you really aren’t alone. If there is one important lesson to take from this is that acting now can make all the difference.

I hope you have a lovely week and hopefully the weather holds out for the bank holiday weekend.

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Insolvency numbers hit a record high

Tuesday, March 23rd, 2010

It will come as no surprise to many of you but the number of people who filed for bankruptcy hit a record high in the last three months of 2009. The figures from the Insolvency Service reveal that a total number of 134,142 people became insolvent over the course of the year out of which 35,574 people were declared bankrupt between October and December. Without doubt, these figures are startling and certainly food for thought.

Of course these numbers dwarf the figures from the last recession in the 1990s when 36,800 insolvencies were recorded in 1992, a time many of us still remember and hoped we would not see again. That said, these statistics unfortunately point towards a similar trend of that of the early 90’s, this time with bankruptcy numbers likely to hit the 145-150,000 mark in 2010.

Bearing in mind all this, one would suspect that insolvency practitioners are very busy at the moment, however, it is important to point out that despite the rise in numbers, the banks are still monitoring the situation. And while most banks are not extending credit, they are not calling in the debts either. Similarly, even though the Inland Revenue has started to exert some pressure on companies that have not paid their PAYE/NI and VAT bills, they are not as yet, adopting a very aggressive stance. With that being said, the general feeling amongst the debt management companies and insolvency practitioners is that this might just well be the quiet before the storm and that post election, the country would witness a dramatic rise in the insolvency cases.

So what has contributed to the rise in the cases of bankruptcy? The 2008 recession, is of course, the most important factor. The adverse economic times has resulted in a large number of people losing their jobs and consequently their inability to pay off their debt. The double digit fall in housing prices have also added to the woes of people who had traditionally depended on the equity in their homes to bail them out of difficult times. Another interesting finding is that there has been an increase in the number of people who have had multiple marriages. This is because they have had fund ex-wives, ex-husbands and kids when the marriage broke down, all this taking a heavy toll on their finances.

If you find yourself in a bad debt situation, then you are not alone. The figures quoted in this blog alone highlight then seriousness of debt in this country. What ever be the reason of your financial crisis, remember that at the end of the day, there is always a way out. You can seek debt advice to understand what options are available to you.

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Resolve to budget more effectively in 2010!

Thursday, December 31st, 2009

As we are approaching the New Year, journalists are offering mixed opinions on how quickly the economy will recover. Fuelled by speculation on the date of the general election, which party will win power and what further spending cuts are in the pipeline, there is a definite split on the speed of the recovery and which areas will see positive signs first.

For the high earners tax increases are on the way, national insurance is rising for us all and there is also the prospect of interest rates increasing from the historically low rate they are at now.  Sadly that isn’t the end of the increases, as VAT is also set to return back to 17.5% from January 1st, meaning that the purchases we make will cost that little bit more.

With all the uncertainty around, I would recommend drawing up a monthly budget and sticking to it, to ensure you are fully in control of your finances.  Another key thing when working to a budget is to review regularly, as things can change quickly without you realising.

One thing which many people do when starting to feel financial strain is to take on additional credit to fund debts.  This is something which should be avoided at all costs, as it doesn’t solve the problem it only adds to it.  The key is to recognise signs of financial problems and seek independent advice early before you get into serious difficulty. The Citizens Advice, National Debtline or ClearStart all offer free and impartial debt advice to help solve debt problems.

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