Tuesday, August 5, 2008

UK debt is "completely out of hand"

Debt in the UK is reaching levels that are out of control, according to one independent financial adviser.

AWD Chase de Vere has claimed that despite warnings over unmanageable credit repayments, many people only become "wise" to debt when it catches up with them.

With interest rates rising, Susan Hannums, savings manager with the firm, claimed that more people are "feeling the pinch" from mortgage repayments and general debt.

"You've just got to be totally sensible. Debt in this country is completely out of hand," she said.

"At some point you've got to start clawing back and be sensible with your spending."

Ms Hannum's comments come in contrast to a recent study by Alliance & Leicester, which found the total value of savings and assets in the UK to be roughly four times higher that that of the nation's mortgages and debts.

However, the wealth is not evenly spread, the bank revealed, as 51 per cent of the nation's net assets and 46 per cent of total savings belong to people in London, the South East and the South West of England.

source moneynews.co.uk

For more information and what can be done about your debt visit www.debtall.com

IVAs 'likely to rise in 2008'

The number of individual voluntary arrangements (IVAs) taken out is likely to increase in 2008, according to Credit Action.

Director of the organisation Chris Tapp said that one of the reasons for the potential rise in IVA applications is that credit is becoming harder to obtain and the cost is also going up.

However, he also stated that "it is slightly unclear" if all of the people who apply for an IVA will be approved.

"There is a slight change in regulation which means that they are harder to come by and the banks are also much less willing to grant IVAs than they were a couple of years ago," he remarked.

Mr Tapp added that the fact that there is "real pressure" being exerted on Britons' finances will mean that more people will attempt to seek such debt management solutions.

There were 10,698 IVAs during the second quarter of 2007, according to the Insolvency Service.

source moneynews.co.uk

For more info on IVA's please vist www.debtall.com

Debt concerns worry 'more consumers'

Debt problems are increasingly worrying Britons, a new survey has revealed.

According to figures from MoneyExpert, 38 per cent of Brits have been worried about repaying debts - possibly from loans and credit cards - in the past three months.

This represents a rise of five per cent compared to the previous quarter, the poll showed.

"Many people are not in severe trouble but are becoming increasingly worried nonetheless. There are many ways to get your finances under control, from debt consolidation to just juggling your borrowing onto cheaper products," director of MoneyExpert Sean Gardner said.

Those who concerned about making repayments over the coming months should "take action" now, he added.

Howard Archer, chief European and UK economist for Global Insight, suggested recently that interest rates may fall to four per cent next year, but stated that a hold decision is the most likely option for the Bank of England this month.

source moneynews.co.uk

For more information visit www.debtall.com

£17 billion credit 'lent without proof of income', says uSwitch

Millions of people have applied successfully for credit cards without being asked to prove the income they stated, according to uSwitch.com.

The price comparison and switching service found that 4.8 million card applicants received over £17 billion of credit in the last 12 months without having to provide so much as a wage slip.

Of those surveyed, five per cent lied about their salary, adding as much as 70 per cent to their income and securing over £693 million of credit.

And 77 per cent of those surveyed (4.4 million) got their card from an institution other than their own bank, which would have little or no information about their credit history.

The prediction from uSwitch.com was that 6.6 million credit card applications will be rejected in the next 12 months.

Simeon Linstead, head of personal finance at uSwitch.com[,] said the credit squeeze was causing some people to lie about their salaries in "sheer desperation" and urged banks to tighten credit checks.

The Times reported shadow chancellor George Osborne telling the annual conference of consumer group Which? that it was important not to let Britain become "hooked on debt".

He reportedly told the conference that personal debt increased in Britain by £1 million every four minutes.

source moneynews.co.uk

For more information visit www.debtall.com

Moneysupermarket.com warns of debt misery

A fifth of people in their 40s have had to turn to loans or credit cards to "keep their heads above water", price comparison website moneysupermarket.com has said.

Rising rents and mortgage costs have forced seven per cent of people to take out a personal loan in the past year, while nine per cent have had to increase credit use over higher housing costs.

The research from the website found that 2.3 million households have had to spend far more on their credit cards.

It also warned of a £30 billion "mortgage migraine" this month as deals come to an end and people face higher monthly repayments.

Tim Moss, head of loans and debt, warned against using loans or gathering interest on a credit card to solve mortgage and rent worries.

He advised shopping around for heating, electricity, food and insurance and suggested renting rooms or house sharing to earn more money.

A Bank of England credit conditions survey found that lenders had cited housing market expectations and changes in their "appetite for risk" as reasons for the decline in credit availability.

Lenders also expect the credit crunch to "tighten" over the next three months.

source moneynews.co.uk

Post Office: Over 50s hard hit by credit crunch

Almost half (47 per cent) of people over 50 are using their credit cards for day-to-day purchases as the credit crunch hits, the Post Office has found.

Reliance on credit for this age group has increased as living costs rise, with 64 per cent of the over 70s regularly buying groceries on credit.

One third of over 50s are unable to save regularly, while 57 per cent of over 70s who do not save say they cannot afford to.

The Post Office advised those over 50 to ensure they are not over or underpaying on their life insurance.

Duncan Caesar-Gordon, Post Office head of protection, said a life plan offers "peace of mind" about such worries and funeral costs and debts.

Most over 50s are worried about the credit crunch, recent research by Millennium revealed.

Finance Markets reported the research, which also found that despite concerns about investments and pensions, three-quarters will not give up holidays, dining out or charity donations and more than half believe their savings are safe in their present bank or building society.

source moneynews.co.uk

Recession would be "more severe" than any in the past

Britain could be headed for a recession "more severe than any of the ones we have experienced in the past", finance website Fool.co.uk has warned.

David Kuo, head of personal finance at the website, said that some Britons, such as house builders and retailers, already believe themselves to be in a recession.

Fool.co.uk says that economists usually define a recession as two consecutive quarters in which a country's gross domestic product drops - or six months of dwindling business activity.

Mr Kuo said that ten years of prosperity meant that if there were a recession, it will "probably be more severe than any of the ones we have experienced in the past."

He added that since banks are taking fewer risks and lending less, people would no longer have the option of borrowing in the recession as in the past.

The British Chambers of Commerce (Q2) Quarterly Economic Survey, published this week, shows a serious risk of recession.

If trends continue, UK business is one quarter away from recession.

The survey also showed that the credit crunch and rising costs have now hit business and the service sector has been affected more than manufacturing.

source moneynews.co.uk