Many consumers are setting about reducing their debts, but such action could leave others in a worse financial situation – particularly those employed in retail.

The latest British Retail Consortium (BRC) figures on retail sales contained in the BRC-KPMG Retail Sales Monitor for January 2012 showed a 0.3 per cent decline in like-for-like sales compared with the same month in 2011. Sales were up by 2.1 per cent on a total basis, compared with 4.2 per cent a year before.

And while 2011 began with a bounce-back after the severe cold of December 2010 suppressed activity, the figures were still the second worst for January in the history of the survey, which began in 1995.

Commenting on the situation, BRC director general Stephen Robertson said: "As 2012 gets underway, it's clear people don't feel any better about the immediate future than they did 12 months ago.

"Customers parked their worries in December and spent, encouraged by discounts. Now, in the new year, reality has bitten again as concerns about jobs, wages and household costs reassert themselves."

He concluded: "Despite consumer confidence improving in January, actual spending shows households concentrating on paying off debt, saving and battening down for another tough year."

So while paying off debt may mean lower repayments for consumers, it could also lead to more retailers struggling and potentially shedding jobs.

And for those who have debts and work in shops, this could mean they get into severe difficulty, faced with ongoing interest bills to pay but without the income to cope.

The actual extent to which consumers have managed to bring their debts down has been very limited, according to research published this week.

PricewaterhouseCoopers said the average UK household reduced its debt by £355 over the course of 2011, but this still left £7,900 owing.

And at this rate the typical amount will still be £7,500 in 2013 – leaving Britons among the most personally indebted in the world, the report noted.

By Joe White

Retail figures show negative side to debt repayment is a post from: ClearDebt Newsdesk a leading UK IVA licensed insolvency services company. ©2011, All Rights Reserved.

A debt charity has advised consumers that they have certain rights they can seek to invoke if they are threatened with bailiffs.

The Money Advice Trust is launching a week-long series of advice sessions showing people how they can deal with such potential instructions and seizure of property – often without legal justification.

It noted bailiffs will often seek to trick their way into a home, with common techniques including requests to use the toilet, pretending to be from the local council and claiming to have a warrant that makes access mandatory.

The Trust's chief executive Joanna Elson noted that the rules bailiffs must operate under are "quite complicated" and most people will not understand them all.

"However there are some rules of thumb that are very useful to be aware of and one of those is to not let the bailiffs in your property,"

She said that people should seek advice and help, even if the bailiff is waiting outside at that very moment.

Householders are not obliged to let bailiffs in unless they have already been inside the home to collect a debt, except in extreme circumstances such as unpaid tax.

While bailiffs may seek to take possessions of goods, a bigger threat for those struggling with mortgages is repossession.

Credit Action figures have revealed this happens somewhere in Britain once every 14 minutes and 17 seconds.

Posted by Paul Thacker

Debt charity warns over bailiffs is a post from: ClearDebt Newsdesk a leading UK IVA licensed insolvency services company. ©2011, All Rights Reserved.

Women have tended to run up too much credit card debt in a bid to maintain unsustainable lifestyles, the head of a body designed to tackle their finance issues has said.

Georgina Earle, director of Women In Debt, said a major aim for ladies in recent years has been to gain "equality", with a key element of this being "financial independence" from husbands.

However, she noted, this has ultimately proved to have left many women in hock to their banks as the debts pile up, with generally lower debts than men being counterbalanced by the fact that they tend to use more expensive forms of credit like storecards and catalogues.

And, she added: "More females have been able to secure credit based on better jobs, higher salaries and if they got into difficulty there was always equity readily available in the home. However the past few years have seen a huge change and I believe that women will fare the worst."

Ladies who have overspent and are laden with arrears may wish to seek a debt management plan, which can spread out repayments.

While many women will look to have some independent spending, a lot of couples take out loans and other accounts together and this can leave both parties jointly and severally liable for the payment of a debt if they split up.

According to figures produced by Credit Action, the average household in the UK has £7,948 of unsecured debt in December 2011.

However, this was slightly lower than November's figure of £7,972.

By James Francis
 

Women ‘suffering too much credit card debt’ is a post from: ClearDebt Newsdesk a leading UK IVA licensed insolvency services company. ©2011, All Rights Reserved.

The latest data on the economy has suggested the UK may not be heading into recession after all, an expert has said.

According to the Markit/CIPS Purchasing Managers' Index (PMI) for services, the sector saw very positive movement in January, with a jump in the index from 54 to 56 and the highest increases in confidence in a single month recorded in the history of the survey.

The news follows an improvement in the manufacturing PMI and Royal London Asset management economist Ian Kernohan said: "While it would be wrong to read too much into one month's set of data, it looks unlikely that the UK has entered a double-dip recession."

Chief economist at Markit Chris Williamson said the indications suggest the UK economy may in fact expand at around "trend" rate (the equivalent of 2-2.5 per cent annually) over the first quarter.

He remarked: "Much uncertainty persists, but this is nevertheless a far better start to 2012 than almost all were expecting to see."

However, for those who are in debt, any economic recovery could take a long time to provide the sort of benefits that could translate into an easing of their situation, such as the availability of better-paid jobs.

For those who are in difficulty now, seeking a debt management plan may help, as it can spread payments out and make it easier to cope, ensuring ends are met while personal finances are still under strain and making matters easier to handle as the economy recovers.

By Joe White
 

Debt problem may remain despite positive PMI is a post from: ClearDebt Newsdesk a leading UK IVA licensed insolvency services company. ©2011, All Rights Reserved.

Large numbers of UK householders still face a very real threat of repossession, new figures have indicated.

The February digest of statistics from Credit Action has shown the level of mortgage debt owed by each household with such a home loan was £110,703 in December, while of the average household debt of £55,823, only £7,948 was not on the mortgage.

While many are managing to pay off their home loans comfortably, many are not, a situation that may be linked to problems such as a sudden loss of income, with 1,797 people being made redundant each day.

But whether it is due to a sudden financial shock or a gradually deteriorating situation taking its eventual toll, the study found a property is repossessed every 14 minutes and 17 seconds.

Based on third quarter figures, the daily tally is 101 properties lost, while 193 mortgage possession claims are issued each day and 153 mortgage possession orders made.

Those who are behind with their mortgage payments should contact their lender in the first instance and may be able to get help through these means.

But if the situation gets worse, householders may be wise to seek further assistance, like a debt management plan, which will spread out the payments more. Among other benefits, this could lower other debt repayments such as those on credit cards or loans, freeing up extra cash to pay the mortgage.

Last week, the latest Alliance Trust UK Financial Reality Index indicated that the problems facing Britons in terms of financial wellbeing eased a little.

But the reading of 62.1 in the final quarter was still way below the score of 100 required to indicate things are getting better and in such circumstances, many homeowners might find they slide increasingly closer to repossession unless they seek help.

Posted by Paul Thacker
 

Repossession still a major problem is a post from: ClearDebt Newsdesk a leading UK IVA licensed insolvency services company. ©2011, All Rights Reserved.

Debt consolidation measures are helping householders to reduce their debt levels, a new survey has indicated.

The February digest of statistics from finance charity Credit Action has revealed the amount of interest being paid by UK consumers on personal debt was £171 million in December 2011, compared with £173 million a year before.

However, this may not be quite as simple a good news story as some would imagine, the charity's chief executive Michelle Highman suggested.

She said it is likely the falls in debt "represent an increased level of caution and concern in your average household, which impacted confidence in putting Christmas on credit last year".

"Whilst it is heartening that people did not overspend, the underlying reasons for not doing so may prove to be a real cause for concern in the coming year," Ms Highman added.

People who are struggling financially to the point that they dare not borrow more may find they are still finding it impossible to pay what they do owe, a situation that could leave those owing £15,000 or more left considering an individual voluntary arrangement.

Such a deal works by agreeing with creditors not to go bankrupt and leave them with nothing, but to pay a reduced amount over a period of up to five years, at the end of which any remaining debt is written off.

One advantage of an IVA is that it is confidential, so the potential stigma of having an insolvency made public knowledge that bankruptcy can cause will be avoided.

The statistics in the survey tally with the findings of the Bank of England's latest Trends in Lending report, which suggested consumer credit borrowing was subdued, with credit card usage levels "weak".

By James Francis

Householders ‘bringing debt down’ is a post from: ClearDebt Newsdesk a leading UK IVA licensed insolvency services company. ©2011, All Rights Reserved.