Past Articles for February, 2008

The sums of money being spent on honeymoon get-aways by newly-weds from around the UK have increased dramatically in recent years, according to a recent study.

Figures collected on behalf of esure have shown that the typical recently-married British couple spent in excess of £1,600 on their honeymoon, while the corresponding figure for those who tied the knot in the 1980’s was closer to £550.

Many couples add to their debt management problems in order to make their honeymoon a holiday to remember and the insurance firm behind the research has revealed that the amount of spending money newlyweds take away with them has also more than doubled since the 1980s.

Head of esure travel insurance Mike Pickard said: “It’s interesting to see how trends have changed over the years and how much pressure there is now on using the honeymoon as the ultimate break away.”

When it comes to keeping your debt management issues under control it is easier to stay single, the price comparison firm Fool.co.uk claimed recently.

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The Bank of England has been tipped by a string of economic experts to wait for another month at least before reducing the base rate of interest.

People looking to become debt free could be hoping for a cut in the cost of borrowing in March, but analysts are convinced that the bank will hold fire in light of concerns over the rate of inflation.

A decision on the base rate of interest will be taken by the bank’s monetary policy committee (MPC) on March 6th and experts from HSBC, Halifax, Lloyds TSB and the Royal Bank of Scotland have all asserted that there will be no change.

Howard Archer from Global Insight said: “Next week’s meeting of the MPC is highly likely to prove too soon to yield the next 25 basis point interest rate cut to five per cent given current elevated inflationary pressures.”

Paul Dales, UK economist with Capital Economics, suggested recently that the Bank of England’s reduction of interest rates this month has not been fully passed on to people who are struggling with debt management problems around the country.

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British financial services firms are likely to demand a deposit from anyone looking to take on a mortgage as trends of recent years are reversed, it has been claimed.

According to the mortgage broker John Chacol, the loan-to-value rates of 100 per cent and over that were available until recently are set to die out altogether in months to come.

This process is likely to result in people making more determined efforts to save a sizable lump sum before taking on a mortgage-related debt management burden, the company has indicated.

A statement from John Charcol read: “This marks a return to our parents’ generation’s philosophy of saving.”

“Some parents may be able to gift deposits but more parents need to keep hold of their own equity to replace the pension funds they have been let down on.”

A report from Scottish Widows recently suggested that people in the UK with grown up children are increasingly being asked to assist their offspring in becoming debt free.

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British consumers have become less confident about spending their own cash in recent months, new research from Legal & General (L&G) has suggested.

According to the study of the UK’s spending mood, the number of people around the country who feel happy to splash the cash has fallen across all age groups and most sharply among women.

With millions of British consumers struggling to become debt free, the firm behind the research has attributed the growing inclination to avoid spending to the issues affecting the national economy.

Additionally, the L&G poll discovered that 11 per cent of people are currently spending more on paying bills and repaying debts than they earn on a monthly basis.

Julia Clayworth, L&G’s wealth management head of marketing, said: “As people become more cautious with their spending habits, now is the time to really think about building a savings plan which could prove invaluable if the recession really takes hold.”

CreditExpert reported recently that the confidence UK consumers have in borrowing has been falling in recent weeks.

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Thousands of people around the country are preparing to add to debt management issues by funding their wedding ceremony through credit, it has been suggested.

According to a report from Sainsbury’s Bank there are likely to be close to 125,000 people around the country taking out personal loans in order to have the kind of wedding they want this year.

The figures from the financial services firm have indicated that a total of over £1 billion in debt will be taken on in order fund wedding ceremonies around the country this year and that the average size of these loans will be around £9,000.

Weddings have been the cause of debt management difficulty for many couples around the country and Sainsbury’s Bank’s latest figures have been released ahead of February 29th, when traditionally women have been more inclined to make a marriage proposal.

Earlier this week, the same banking group predicted that millions of Britons will switch their credit card debts from one provider to another over the course of the next few months.

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The confidence of the typical UK consumer to take on more credit has been falling in recent months and looks set to continue in the same vein, according to CreditExpert.

More and more homeowners around the country are deciding not to look into the possibility of moving house and are instead looking to clear the debts they have already accumulated.

Furthermore, close to half of all the people who have not taken the first step onto the housing ladder have indicated that they now have not intention to try, the credit reference firm reports.

Many people are concerned by the prospect of an economic slowdown and are looking to reduce the scale of their debt management problems as much as possible, the company has suggested.

Darryl Bowman, director of CreditExpert, commented: “Whatever your financial aspirations, making sure your credit report is in the best possible shape is crucial to allow you to be judged fairly by lenders.”

Last week, a member of the Bank of England’s monetary policy committee published a report that claimed the risk of a recession for the UK’s economy is “remote”.

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A warning has been issued over the potential costs that can be incurred over the course of an internet service contract.

According to Moneysupermarket.com, many consumers are unaware that they are liable to being charged considerable sums if they fail to pay their internet bills on time or decide they want to terminate their contract.

Each of these issues are outlined in the small print of an internet service deal but given that most people do not take the time to read it through, these “hidden” charges could come as a nasty shock to people trying to become debt free.

“If something looks too good to be true, it usually is,” remarked Rob Barnes, head of broadband and mobiles at the price comparison firm.

“It’s definitely a case of ‘buyer beware’ with broadband, so read the contract fully before you sign up,” he said.

Last week, uSwitch.com and other price comparison groups criticised British Gas for announcing “massive” profits just days after introducing energy price increases across the UK.

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Many of the high street banks around the UK are backing down over the issue of unauthorised current account overdraft rates, according to one financial comparison firm.

Research by MoneyExpert.com has established that the average rate charged for this particular kind of unauthorised lending has fallen from around 25.25 per cent to just over 20 per cent.

Despite this apparent back track on the issue, the banks are still fighting a court battle with the Office of Fair Trading over alleged unfair charges and many people are finding their debt management difficulties worsened by creditor behaviour.

“It is encouraging that average unauthorised overdraft rates have dropped by five per cent in the past year,” commented MoneyExpert.com’s chief executive Sean Gardener.

“That said though a 20 per cent rate is still very high and well above the average standard credit card rate.”

A report last week from Birmingham Midshires suggested that thousands of British consumers are raiding their savings accounts to deal with their growing debt management problems.

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Rises in the rate of inflation across the country are prompting many people to take on more debt, it has been claimed.

According to Chris Tapp, director of the Credit Action charity, consumers are being obliged to spend more on their everyday living expenses and as a result are turning more often to credit card debt to fund their outgoings.

Rising food and energy prices leave some households with little choice but to borrow to get by and this can often spark a spiral of debt management

"This is a very worrying scenario to find yourself in and at that point - when you start using your credit card as a necessity, or you're unable to pay it off month by month - you should go and get help, he said.

Figures compiled recently by Credit Action revealed that the overall personal debt mountain in the UK is now worth in excess of £1,400 billion.

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The debts accumulated by young adults around the UK are proving to be a major drain on the savings set aside by their parents, according to recent research.

According to a study by Scottish Widows, most British parents with adult children have helped their offspring out financially and in 42 per cent of cases, the handouts have been used to clear debt.

Millions of parents have loaned or given their grown-up children money and in total their generosity has been worth as much as £67 billion to the younger generation, the latest figures have indicated.

Furthermore, the rising prevalence of debt management problems could have played a part in seeing 16 per cent more Britons ask their parents for money this year than was the case 12 months ago.

Anne Young, savings expert at Scottish Widows, said: “It seems that although people could well be tightening the purse strings at a time when the credit crunch could affect finances, adult children are still managing to extract what they can from mum and dad.”

Price comparison firm the Fool.co.uk claimed last week that when it comes to your bank balance it pays to be single.

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