Past Articles for the Debt Management Category

Around two-thirds of people are concerned their pension will be insufficient to fund their retirement, meaning they could fall into debt, research has suggested.

Figures collated by the National Association of Pension Funds show that only 34 per cent of people believe they will be able to cope financially once they stop working.

The study found that 22 per cent are “not at all confident” they will have enough money, while 38 per cent are “not very” sure whether or not they will be able to manage.

Keith Churchouse, director of Churchouse Family Planning, said that many may not have planned efficiently for the future and might no longer feel their money is safe.

He explained: “There [has] been the collapse of numerous pension and insurance companies over the course of the last ten or 15 years.”

Numbers released by the Office for National Statistics in December 2009 revealed that 53 per cent of men and 58 per cent of women in full-time jobs in Great Britain were members of an employment pension scheme.

By Joe Shervin

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Credit card rates need to be slashed by the government to help people struggling with debt and to aid the revival of the economy, an industry expert has suggested.

Peter Gerrard, from Moneyextra.com, said that blame for high credit debt statistics should not be diverted from the Bank of England, rather the government should be listening to what taxpayers have to say.

He commented: “If the banks continue to keep credit card rates as these exceptionally high rates, there is no way consumers have a chance of paying off their debt.”

The government needs to stop debating and take action to lower the numbers and prevent the general public from falling into “debt doom”, he added.

Last month, figures compiled by Moneyfacts.co.uk revealed credit card rates had reached a 12-year high - peaking at 18.8 per cent - the steepest since February 1998, when they stood at 21.1 per cent.

By Joe Shervin

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Women could be risking debt if their only plan to survive if they become ill is to rely on state benefits, a life insurance specialist has warned.

LifeSearch, speaking before the upcoming Mothers Day celebration, has suggested most women have underestimated the amount of money they will receive from the state if they are unable to work.

A 30-year-old female, earning £35,000 a month, would only be able to collect a maximum of £64.30 a week - or £275.50 per month - through Employment and Support Allowance (not taking into account company sick pay), the protection company warned.

Matt Morris, senior policy advisor at LifeSearch, said: “It is not just working women who should be thinking abut protecting their finances … the value that mothers provide to the home through daily activities is massively underrated.”

Last month, the Consumer Credit Counselling Service warned people not to become too complacent over their debts, reminding them that repayments still have to be made.

By Joe Shervin

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People may have to become more vigilant about their finances to avoid debt, as at least three million borrowers do not know the interest they are paying on their mortgage.

Almost 30 per cent of those who have accepted loans to pay for their housing are unsure of the repayment details, research from the Post Office has revealed.

Ray Boulger, senior technical manager at John Charcol, said: “In general, I would say that there is a considerable lack of knowledge about people’s specific mortgage products.”

He added that many people are not particularly interested in changes to their repayment rate and consider their mortgage merely to be a “means to an end” to grant them access to the housing market.

The Council of Mortgage Lenders announced on February 18th that gross mortgage lending fell to around £9 billion in January 2010, a 21 per cent drop from £11.5 billion the same time last year.

By Joe Shervin

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The creation of a “new generation” of financially hindered people could lead to increased debt problems, an industry expert has suggested.

Teresa Perchard, director of policy at Citizens Advice, warned that the recession had resulted in a group of people unable to cope financially.

She cited rising bill costs and the significant growth of child, pensioner and fuel poverty as the reasons for the problem.

Speaking from the Northern Money Conference 2010 at the Contemporary Urban Centre in Liverpool, she said: “Water debt [and] utility debt have all been going up over the last year and that is creating a new generation of financially excluded people.”

The conference, which is jointly organised by the Research Unit for Financial Inclusion at John Moores University and the Association of British Credit Unions Limited, has held residency in the Merseyside city each year since 2006 and has expanded to become the biggest such financial event in Britain.

By Joe Shervin

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Savings levels in Britain have significantly dropped this winter, suggesting people could be flirting with debt, a study has shown.

According to NS&I’s Savings Survey, the population is putting aside less money than it has for the previous two years.

Average savings now stand at £81.94 per month - a drop compared to this time in 2008 (£90.12).

It means that the British public is currently conserving 6.25 per cent of their monthly income, which is the lowest level since 2007 and a decrease from last year (6.48 per cent).

Tim Mack, senior savings spokesman at NS&I, said: “With the new financial year approaching, now is a good time for people to take a closer look at their finances and set themselves goals for the years ahead.”

Earlier in the week, figures released by Credit Action showed that the average UK household debt is almost at the £60 million mark.

By Joe Shervin

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Retired couples could face debt troubles as the cost of living has dramatically increased, a study suggests.

Research carried out by MGM Advantage has shown that people aged between 65 and 74 would have to locate an extra £774.70 a year to maintain the quality of life they enjoyed 12 months previously.

The escalated figures have been put down to inflation, with the amount needed for those over 75 estimated at £383.91 and the average for all households calculated at £1,222.66.

Aston Goodey, sales and marketing director at MGM Advantage, proposed that extra product options were required for those leaving work.

He said: “More needs to be done across the industry to improve the choice for people at retirement.”

In February, it was disclosed by BeGrand.net that grandparents were denying themselves creature comforts in order to finance their grandchildren’s upkeep - spending their pensions on items such as toys, school uniforms and shoes.

By Joe Shervin

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A labour MP has said that the government will be taking measures to build a more responsible financial framework to help people from slipping into debt.

Helen Goodman, the secretary of state at the Department for Work and Pensions, was speaking at the Northern Money Conference 2010 at the Contemporary Urban Centre in Liverpool.

She said that the implementation of strong credit and re-jigged social funds and better money-advice services, plus increased pressure on loan sharks, “will form the backbone of our programme to build a more socially responsible financial system”.

A people’s bank at the Post Office is in the pipeline, as is the introduction - later in the year - of a Saving Gateway to help people organise their money, she added.

Total net lending to consumers increased by £2 billion in January, the latest statistics released by the Bank of England - in their Lending to Individuals report - indicate.

By Joe Shervin

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Britons wary of falling into debt saved money on their holidays last year by booking directly, research has shown.

A study by Santander Cards has revealed that a collective £4.92 billion was saved as the public tightened their belts.

An average of £423 was conserved by people either booking online, over the phone or by staying with friends - cutting out the costs of travel agents and tour operators - 3.3 million of which claimed to have maintained over £500.

Emma Roberts, director of Santander Cards, said: “It’s not surprising that in the current climate, holidaymakers are increasingly looking for value and are prepared to do the homework themselves”.

Around 25 million UK adults went on holiday in 2009, 11.6 million of which - nearly half - saved money when booking their travel and accommodation.

The news follows a recent report carried out by LV= that found over three-quarters of parents were being especially thrifty with their family finances in light of the current economic situation.

By Joe Shervin

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New changes will make Debt Relief Orders (DROs) available to a wider range of people, an expert has said.

The Department for Business, Innovation and Skills has announced that the alterations will take effect from April 6th.

Tom Howard, a spokesperson for the Consumer Credit Counselling Service, explained: “For some, insolvency is the best option and DROs, where appropriate, are a useful tool in helping people confront and resolve debt problems.”

Currently, people with a pension that is over £300 are eligible to apply for a DRO, but the changes will allow people on a lesser income to claim.

However, Mr Howard also suggested the government needs to be alert to face any potential teething problems the scheme may bring and will have to constantly review the orders.

The Office for National Statistics recently released figures showing that over 35,000 individual cases of insolvency were recorded in England and Wales in the fourth quarter of 2009.

By Joe Shervin

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