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Archive for Spending

Debt Management Plans on the Up

Friday, August 1st, 2008

TDX Group, the organisation behind the Group Debt Index, claim that there has been a significant rise in the number of debt management plans taken out in recent months.

The Group claim that debt management, such as Individual Voluntary Agreements (IVAs) will rise by a further £5 million by Christmas, growing steadily by year end.

Mark Onyett, chief executive of the TDX Group said: “We’re already seeing far higher numbers of consumers struggling with personal debts and the pressure is set to intensify over the coming months.”

The research showed that an increasing number of people with financial problems are finding it difficult to make repayments on loan and credit card debts.

This accords with research showing the house repossessions are steadily climbing and a rise in people approaching debt charities for advice.

Since the start of the credit crunch many people have tightened their belts, but it simply isn’t enough.

Whilst most families are wise enough not to extend their credit with further personal loans, the increases in the cost of living has pushed many families deeply into debt.

Unfortunately, this Christmas could see many families hard pushed to pay their bills, let alone have the festive season of their dreams.

Posted in Bad Credit, Borrowing, Budgeting, Consumer Credit, Consumer debt, Credit Card, Debt management, Financial news, Financial products, IVAs, Missed payments, Personal debt, Personal loans, Secured loans, Spending, UK Finance, Unsecured loans | No Comments »

Credit Crunch will hurt youngest most

Monday, June 30th, 2008

One of the benefits of being old has to be experience: the credit crunch that most people are experiencing with the UK’s economy has all been witnessed before. What is going on today with financial institutions last happened in the early 1990s, but even before that the older generation have witnessed times when wanting something meant saving up, not taking out yet another cheap loan.

Whilst we hope a full blown recession won’t be seen, the boom times seem to be definitely at an end for now and that means a change in financial habits. We are finally getting a wake up call that we cannot continue to borrow indefinitely and have to live without some of the things that we feel entitled to.

This adjustment should not be too difficult to take on board for older generations, but it might be a bit more of a tough adjustment for younger people. The young will have little recollection of the late eighties when the economy last went into recession and no memory of the days when loans were something only for businesses or buying a house.

The nation as a whole has grown used to the concept of regular holidays, new cars as a luxury, not a necessity, and splashing out on meals and clothes whenever the need takes. However, for many of those older than the ‘baby boomers’ (those born post-war), the memories are still fresh of the days of ‘scrimp and save’.

Every generation has seen greater prosperity in this country and the days of ‘make do and mend’, ‘grow your own’ or clothes made from a penny pattern seem like myth to the youngest adults today.

The concept of going overdrawn was once upon a time considered shocking, and for many of the older generation today that viewpoint still holds. For these people, getting back into old ways of careful budgeting and knowing where every penny has gone will come easily.

For the younger generation, used to falling back on easy credit, or borrowing money to indulge a whim, budgeting is going to come as a sharp shock. The fact is that right now lenders are either unwilling or unable to lend money as lavishly as they used to, so if you don’t look after the money you have, you can’t bank on an easy loan to bail you out.

Posted in Bad Credit, Borrowing, Consumer Credit, Consumer debt, Debt management, Financial news, Overdrafts, Personal debt, Personal loans, Spending, UK Finance, Unsecured loans | No Comments »

Heightened fears for UK housing market

Thursday, June 5th, 2008

More and more existing home owners are find it harder to sell their homes as fears of recession keep people from moving. But in an ironic twist, first time buyers are unable to take advantage of the new low house prices because of a lack of affordable home loans on the market.

The growing concern over the state of the economy is making many people more unwilling to overstretch themselves by buying a new home now. New figures published by the Halifax have shown that house prices fell by their sharpest rate in more than fifteen years in May.

Many buyers were hoping for a fall in borrowing costs when the Bank of England dropped the base rate to 5%. However, lenders have been unable to pass on the cut as the Libor rate remains high and liquidity low. Loans of all types have been affected.

The Bank of England is due to announce its latest interest rate today and is widely tipped to leave the rate at 5%. Consumers may feel this is a blow, but with the Government worried about inflation, the Bank is unlikely to cut the rate again yet.

Halifax’s chief economist, Martin Ellis, said: “The decline in prices is caused by the difficulties created for potential house purchasers by the rapid rise in house prices in the last few years, a squeeze on spending power and the reduction in credit availability,”

Halifax warn that house prices could continue to drop next year. This is potentially good news for those waiting to afford their first home, but may still not be enough to counteract the credit crunch.

Britons have seen their wages rise 4% in the past year, a stark contrast to the 9% rise in fuel prices seen and the 7% increase in food costs.

Sadly for many, property rental prices have also been increasing as more buy-to-let investors pull out of the market, leaving a diminishing pool of properties available for rent.

Posted in Bad Credit, Borrowing, Consumer Credit, Consumer debt, Debt management, Financial news, First time buyers, Homeowner Loans, Homeowners, House buying, Housing news, Inflation, interest rates, mortgages, Personal debt, Personal loans, Rental property, Secured loans, Spending, UK Finance, Unsecured loans | No Comments »

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