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Thu 21st Dec, 2006
Posted in Consumer Credit, UK Finance, Consumer debt, Financial news, Borrowing, Personal debt at 11:44 am by admin
The HM TREASURY News Release (PN01) issued by The Government News Network on 6 December 2006 reveals the new initiatives to tackle financial inclusion
Today the Government announced details of a number of measures being implemented as part of its wider strategy to promote financial inclusion. Key measures include the details of a £5.4 million campaign to assist financially excluded people to access mainstream banking and credit products.
It also includes new funding of £2.5 million to increase the number of new advisers, specialising in free face-to-face debt and money advice in areas of high financial exclusion, to over 500.
The public sector net debt remains low and stable over the forecast period, remaining below 39 per cent of GDP, below the 40 per cent ceiling set in the sustainable investment rule.
Ten years ago Britain was 7th in the G7, bottom of the league for national income per head. In the last two years Britain has been second only to the USA.
In no other decade has Britain’s personal wealth , up 60 per cent, grown so fast. Britain continues to combine recession free growth with a decade of employment and productivity growth.
This explains why the loan companies are pressuring government to combat the increase in IVAs. The pre budget reports, and current economic statistics, paints a different picture than the debt consolidation companies. Britain is not in a recession. Consumers do not need to panic.
UK consumers do not need to rush into any debt management scheme. Analysts predict that Britain’s economy will remain healthy for several years.
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Posted in Consumer Credit, Banking, UK Finance, interest rates, Savings, Financial products, Credit record, Balance transfer at 11:42 am by admin
If you have been with the same bank for some years now and haven’t been looking at what is available from rival banks, then you could be in for a big surprise. The deals that are on offer on your typical bank account are drastically different today from what they were just a few years ago. Current accounts now offer everything from interest free overdrafts, to signing up gifts and gifts for referring friends, and they will even pay interest on your current account balance at rates that will match the best savings accounts.
So why are so many people sticking with their old under performing bank accounts? Well basically they are afraid of the hassle of changing bank accounts. Some people are also afraid of how it would appear on their credit score if they change bank accounts. While it may look suspicious to some lenders if you are constantly jumping from bank to bank without a reasonable explanation, switching bank accounts is a common practice that will not have a serious negative impact on most people’s credit rating.
Switching bank accounts can also be a lot easier than you might think. While it may have been difficult in the past, switching now is quick and simple, and banks can even adopt and continue all of your standing orders and direct debits so that you do not have to go through the process of setting these up again. The only thing you really have to do is make sure that you tell people who pay money into your account that you have switched. For most people this would really only be their employer and perhaps the Inland Revenue for receiving benefits and tax credits. That is a small price to pay for the benefits that can be gained from a better bank account.
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Thu 14th Dec, 2006
Posted in Bad Credit, Consumer Credit, Personal loans, UK Finance, Consumer debt, Student debt, Unsecured loans, Financial news, Borrowing, Personal debt at 2:03 pm by admin
Research from the British Medical Association (BMA) has found that the average debt of a final year medical student now exceeds £21,000, reports the Guardian. This is £1,000 more than the basic annual salary of a junior doctor. The BMA’s survey of almost 2,000 medical students showed that average debt levels has risen from £20,963 last year to £21,755 this year, with new doctors earning £20,741 in their first year.
The research showed that 13 per cent of those surveyed owed more than £25,000, with 100 owing over £30,000 and one student reported as owing £53,000. Medical students study for longer than students on other degree courses and may have to buy specialist equipment. Some 90 per cent of the students surveyed had student loans, with 60 per cent also having an overdraft and 17 per cent having a bank loan. More than 60 per cent of those polled were also carrying a £1,000 credit card debt.
The BMA says that debt levels were likely to rise in the wake of university top up fees, adding that this might stop people from poorer backgrounds from training for the medical profession. The Guardian quotes Emily Rigby, of the BMA’s medical students committee, as saying: ‘The government has said it wants to increase the number of UK doctors and to widen participation in medicine. It will fail in both of these aims unless it takes action to tackle the significant financial pressures facing medical students. Becoming a doctor should be about your commitment to medicine and patient care, not the amount of money you are prepared to borrow.’
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Posted in Bad Credit, Consumer Credit, UK Finance, Consumer debt, IVAs, Financial products, Spending, Unsecured loans, Financial news, Borrowing, Insolvency, Personal debt at 2:02 pm by admin
Debt Free Direct has said that radio advertisements that claim that people with money problems can escape up to 80 per cent of their debts are ‘misleading and unethical’, reports the Guardian. The debt management company has complained to the Advertising Standards Authority (ASA) that the rival firms have flouted advertising rules by exaggerating their ability to write off debts to banks and other lenders. Debt Free Direct named several firms in its complaint dossier, including Accuma, Spectrum and W3 Debt Solutions.
The ASA is considering the dossier and the Guardian suggests that recent accusations by Shadow Chancellor George Osborne about debt dodging will put the organisation under pressure to launch a full inquiry. Mr Osborne said: ‘I am concerned that people may be being encouraged by unscrupulous IVA companies to commit to IVAs, even where this may not be the right course of action.’ He called for ‘firm action’ against companies offering ‘false or misleading advice.’
Mr Osborne added that companies counselled people on low incomes to sign individual voluntary arrangements, which harm their credit rating. Instead, they could make an informal arrangement with their creditors. IVAs are legal contracts which allow debtors to make monthly repayments following a deal to pay off a reduced amount of their debt. According to PricewaterhouseCoopers an IVA is taken up every seven minutes in the UK.
Debt Free Direct says that people are ‘morally obliged to repay their debts’, adding: ‘It is not right to help people avoid their legal liabilities.’
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Posted in Bad Credit, Banking, UK Finance, Consumer debt, Spending, Financial news, Borrowing, Personal debt at 2:02 pm by admin
A great many employers pay their employees early in December. This is an attempt on the part of employers to make your life that little bit easier in the run up to Christmas when most people have a lot more expenses than usual. However, there is the obvious catch that if you get paid early, you will have to make this pay check last that much longer as you will usually have a long gap until your next pay check comes through at the end of January. Therefore make sure that when you get your early pay check in December that you are fully aware of how long this money must last you and take the steps necessary to ensure that you will not be left short in the new year.
There are a couple of simple things that you can do to make your life that little bit easier in January. For one thing, you should probably try to keep your spending under control over the festive period. Don’t let your spending get out of hand and remember that debt, just like a puppy, is not just for Christmas but for the whole year.
Another good tip for making things a little easier at the end of the year is to buy some of your gifts early. This will spread the cost of Christmas over more months and leave things feeling less tight in December. You can also consider putting a little aside in the months leading up to Christmas for use during December.
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Wed 13th Dec, 2006
Posted in Bad Credit, Consumer Credit, UK Finance, Consumer debt, Spending, Financial news, Borrowing, Personal debt at 12:43 pm by admin
There is no doubt that the Conservative party of today is a new political party. At least that is the image that the party is trying to portray to voters. It is clear that they have had to reinvent themselves. One of the areas that the party has been putting a lot of attention on recently is the country’s debt problem. It appears as if the Conservatives have rightly identified debt as one of the largest and most serious issues facing the country’s young people.
One of the initiatives that the party has announced is their plan for compulsory education on personal finances for 12 to 18 year olds. This would be treated as any other examinable subject at school. The claim is that this will make young people less likely to get into unmanageable debt.
While some critics have said that the only reason the party is getting into this area is to win votes and appear like the friend of poorer and younger voters. However, debt charities are praising the policy and saying that the more attention that can be put on this subject the better.
Another thing that people have been identifying in new Tory policies is an increased interest and focus on the problems of society’s most disadvantaged areas. It could well be that the party traditionally associated with wealthy, older, white men, is becoming the party of single mothers, and indebted teenagers.
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Posted in Consumer Credit, UK Finance, Financial products, Spending, Property, Financial news at 12:42 pm by admin
The richest 2 per cent of adults in the world own half the global household wealth. This is according to a study by the Helsinki-based World Institute for Development Economics Research of the United Nations University (UNU-WIDER). “World Distribution of Household Wealth,” is the first study to cover all countries and all major components of household wealth, including financial assets and debts, land, buildings and other tangible property.
Despite the predictions of doom, UK is among the richest people in the world. Much of this is due to the recent increase in housing prices. Economists are at a loss to explain why the banks are unrestrained when lending loans to UK consumers. However, when compared to the international market, UK consumers are in one of the best positions to use their home equity to build wealth.
Many UK consumers have benefited from the trend. The UK economy is healthy enough to attract 23 of the world’s billionaires. The rich migrate to London because it is safe and politically stable. The courts protect property rights, and the undefined class system protects their lifestyle. This is based on research by Forbes Magazine.
Projections from companies like Oxford Economic Forecasting, the National Housing Federation, predict a 40 per cent increase in homes in the South East. This allows homeowners to reach the demi-wealthy income level, even though their income is not growing. These people are becoming a part of the ‘land rich-cash poor’ section of the population. However, their equity is secure in their homes, at least for the next few years.
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Tue 12th Dec, 2006
Posted in Consumer Credit, UK Finance, Consumer debt, Property, Financial news, Borrowing, Car ownership, Car finance, Car loans at 12:19 pm by admin
A survey of more than 1,500 consumers has found that a major concern for consumers who are researching their next car purchase is that they don’t end up with a stolen car. Consumers who have bought a used car in the past three years are particularly concerned about this. However, Experian says that used car buyers face another problem, as there are many fraudsters who will sell them a car with finance still outstanding on it. Last year, there were 3.6 million new car finance agreements, with a further 2.8 million agreements up to the end of September 2006.
Rob Whalley, Managing Director of Experian’s Automotive division, said: ‘Not enough car buyers are aware of what may happen if they do end up with a car that still has finance outstanding on it. If a loan or hire purchase agreement is still outstanding on a car that has just been bought, the finance company will retain a legal interest in the vehicle until the loan is repaid in full. If the loan is not repaid, the car could be repossessed.’
He added: ‘The mistake that a lot of car buyers make is to believe that as an innocent purchaser, they would easily retain ownership of a vehicle in this situation. However, they would have to prove that they really are an innocent purchaser to the finance company which, in practice, can be an extremely difficult and lengthy process.’
Experian offers a vehicle history check service called Autocheck which reveals the full financial history of a used car. Mr Whalley added: ‘We have found that around 30 per cent of all the cars we have checked still have finance on them. This does not necessarily mean that every single one of those cars was sold fraudulently, but it does highlight the extent of the issue and the fact that it is better to be safe than sorry and ensure that the previous owner pays off any finance agreement in full before ownership passes hands.’
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Posted in Bad Credit, Consumer Credit, UK Finance, Consumer debt, Property, Financial news, Borrowing, Insolvency at 12:14 pm by admin
The Conservative Party is to reveal policies to address personal debt, ignorance about money and financial exclusion, reports the Guardian. Shadow Chancellor George Osborne is to propose that credit and store cards should have a ‘hard’ cooling off period. This would mean that they would have to wait seven to ten days before using a new credit card or store card. Store cards often attract customers by offering discounts and instant credit. The Finance and Leasing Association, a trade body for the consumer credit industry, said this type of cooling off period would be ‘overkill’ and would be unlikely to prevent people from using store cards or credit cards irresponsibly.
At a Conservative Party debt summit, the Shadow Chancellor is also expected to propose that 11 to 18 year olds receive compulsory financial education and that annual percentage rates be more prominently and simply explains. Mr Osborne has previously criticised the government’s failure to tackle national debt problems. In relation to the record high personal insolvency figures, he said: ‘There is a personal tragedy behind each of these insolvencies and this shows that many families are feeling the pressure of rising interest rates and fuel bills.’
The Shadow Chancellor has called on banks to be more responsible lenders and has urged the government to tackle the problem, warning that ‘an economy built on borrowed money is built on borrowed time.’ Mr Osborne’s mother was forced to close a business last year after incurring huge losses. The Osborne family is recorded as having invested £372,000 in her delicatessen, with only £8,000 left by the time it closed.
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Posted in Consumer Credit, Homeowner Loans, UK Finance, interest rates, Consumer debt, Homeowners, House buying, First time buyers, Property, Financial news, Housing news, Borrowing at 12:12 pm by admin
Moneyextra.com has released the latest figures from its mortgage comparison tool. These show that the value of the average first time buyer property search increased by 12.6 per cent to £176,241. This compares with an increase of 8.13 per cent to £268,508 for those looking to move to a new home and a rise of 4 per cent for all properties to £217,098.
According to the statistics, the average mortgage comparison carried out by first-time buyers rose to £140,991, which represents a loan-to-value ratio of 80 per cent. This means that first time buyers need an average deposit of more than £35,000, which is more than 150 per cent of average annual earnings.
The average value of mortgages completed by Moneyextra customers in October was £146,203.17, up by 8.37 per cent on the average value of loans completed in October 2005. The overall average value of loans completed during the first 10 months of the year was £142,029.34.
In other news, Woolwich has launched new mortgage products to beat the base rate increase. The mortgage is fixed at 5.19 per cent for two years, before reverting to a lifetime tracker at 0.19 per cent above the Bank of England base rate.
Andy Gray, head of mortgages for Woolwich said: ‘Economists are divided over how much higher interest rates will go with many expecting one if not two further rises. This new product allows borrowers, nervous about short term interest rate movements, to fix now to cover any short term hikes but then have the advantage of switching to a market leading lifetime tracker in two years which could have the advantage of tracking rates down if the interest rate situation takes a turn for the better.’
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