by News Team on July 15th, 2011
People may be being forced into debt because they are only being offered low-wage jobs, it has been suggested.
According to the Work Foundation, the shrinking number of opportunities in the mid-wage range is causing competition for positions with less healthy salaries die to lack of options.
However, these low-skill jobs – such as food service handlers, customer service advisors and domestic cleaners – do not pay well and for those used to higher earnings, the reduced monthly pay could lead to people seeking loans to stay afloat financially.
At the same time, over-qualified candidates are being offered these roles over those better suited to them – causing more unemployment and debt risks.
The organisation revealed office administration and secretarial posts have been in decline, as have technical roles in plant processing and metal machine work – traditional mid-wage jobs.
Meanwhile, low wage positions such as those in the caring industry are on the rise.
Researcher at the Work Foundation and author of The Hourglass and the Escalator: Labour Market Change and Mobility Dr Paul Sissons said: "Those losing middle-skilled jobs and 'bumping down' into lower-wage work can experience both a loss of income and an under-utilisation of skills."
He added: "Workers who move into low-wage work often find it difficult to move up the career ladder. While for those with the fewest skills, the increased competition for low-wage jobs means many struggle to find employment at all."
This follows a report by the Consumer Credit Counselling Service, which revealed millions of UK households have been identified as financially vulnerable and at risk of debt.
By James Francis
Posted in Debt Management, Personal Debt | No Comments »
by News Team on July 13th, 2011
A drop in unemployment levels in Scotland could mean some consumers can now get to grips with their debt problems.
According to the Scottish government, first minister Alex Salmond welcomed this further fall, which revealed a decline of 11,000 over the period between March and May this year.
This is the eighth reported drop in a row – the first time since between December 2009 and February 2010 that joblessness in Scotland has been under the UK level.
As a result, the country now has a lower level of unemployment than the nation overall, in addition to higher employment and a lower rate of economic inactivity.
Mr Salmond said this was indicative that the Scottish government's economic policy was working and seems to be continuing to make and protect positions across various communities.
He warned, however, that there must be no complacency as a result of this good news.
Mr Salmond added that more needed to be done to support job creation and secure investment to drive Scotland's economic activity to full recovery.
"We now have lower unemployment, higher employment and a lower rate of economic inactivity in Scotland than the UK as a whole – and the lowest joblessness rate in Scotland for 18 months, with the eighth consecutive reported fall," he stated.
This follows news from the Daily Telegraph that overall UK debt is set to pass 110 per cent of the gross domestic product within 50 years.
Debt levels are currently at 60.6 per cent of this – which is the equivalent of £920 billion.
By Amy White
Posted in Bankruptcy, Debt Management, Personal Debt | No Comments »
by News Team on July 13th, 2011
Millions of homes in the UK have been identified as financially vulnerable, which could mean serious debt problems are on the near horizon for the majority of Brits.
According to the Consumer Credit Counselling Service (CCCS), 6.2 million households have been flagged up as having significant monetary difficulties in its Debt and Household Incomes report.
In addition, 3.2 million people are already in financial difficulty, with these consumers admitting they are either subject to some kind of debt action like insolvency, or are three months behind with a debt repayment.
The study also revealed that those who were most vulnerable included the two million households with annual incomes of less than £13,500, 4.3 million with low or zero savings to their name, 2.2 million struggling to pay mortgages, two million in rent arrears, 1.1 million unemployed workers and 600,000 single parent families.
Lord Stevenson of Balmacara, chairman of CCCS, stated: "CCCS was contacted by almost 418,000 people last year and our data reveals the stark realities faced by many decent, ordinary people who struggle to make ends meet in these difficult economic times."
"It is important that the complexities of their vulnerability are understood and addressed by government as well as the financial and charitable sectors," he added.
This follows comments made by Shelter chief executive Campbell Robb, who told the Daily Mirror that all it takes is one factor – such as a redundancy or increased outgoings – to push somebody over the edge into serious financial difficulty and debt problems.
By James Francis
Posted in Bankruptcy, Creditor Behaviour, Debt Management, Debt and Young People, Houses and Mortgages, IVAs, Personal Debt | No Comments »
by News Team on July 12th, 2011
It seems the three-week mark is when consumers find they have run out of cash and reach for the plastic, with many relying on this to get them to the next time their employer pays them their wages.
This is according to Moneysupermarket.com, which found a quarter of UK consumers (11 million people) add to their credit card debt when they run out of funds in their current account.
People who use this as a crutch tend to need to call on their flexible friend 21 days after their payslip has been given to them, while around one in ten people pull out the plastic less than 15 days after they have been paid.
The research found that the Welsh are quickest to add to their credit card debt, relying on these financial tools ten days after pay day on average, while people living in the east of England wait the longest – 27 days – before they resort to using borrowed funds.
Furthermore, women were more likely to whip out the plastic than their male counterparts, with 13 per cent of female consumers relying on their card within the first fortnight of having their wages come through, compared to six per cent of gents.
Head of banking at Moneysupermarket.com Kevin Mountford said: "Unless you plan this properly and know you're able to pay off your balance, this can be a dangerous trap to fall into."
This follows a report by Think Money, which suggested debt consolidation to people who have multiple loans or credit cards – however, it was suggested people consider all their options before settling on this.
By Joe White
Posted in Creditor Behaviour, Debt Management, Debt and Young People, Personal Debt | No Comments »
by News Team on July 12th, 2011
Data has revealed that terraced properties are the most likely types of houses to be repossessed.
According to HML's regional forecast, these dwellings will account for 40 per cent of all those reclaimed by lenders this year.
The company stated nearly a quarter (24 per cent) of repossessed houses will be apartments or flats, 21 per cent will be semi-detached properties and 15 per cent will be detached homes.
There will be around 33,260 repossessions in 2011, with this figure climbing to 40,000 next year, according to chief commercial and finance officer at HML Neil Waterman.
He stated that most terraced houses and flats belong to first-time buyers, who may have encountered difficulties such as negative equity since the recession, which has wiped as much as 20 per cent from the value of some UK properties.
Mr Waterman recognised that wage freezes, job security, rising living costs and government cuts have weighed heavily on most householders' finances.
"These factors are starting to impact on homeowners, as there has been a moderate increase in the number of borrowers whose arrears represent more than 10 per cent of the value of their mortgage," he remarked, adding: "This is likely to feed through into higher repossessions next year."
And senior technical manager at John Charcol Ray Boulger claimed the number of repossessions will rise if interest rates increase too quickly.
He noted that such action from the Bank of England could see hard-up householders facing large increases in the cost of their mortgages that they cannot afford to pay down.
By Joe White
Posted in Debt Management, Houses and Mortgages, Personal Debt | 1 Comment »
by News Team on July 11th, 2011
People who have anxieties about their dealings with numerous lenders and paying off multiple loans may be the ideal candidates for debt consolidation.
This is according to Think Money, which claimed those who feel stressed about the pressures of several arrangements may find this solution is the best.
However, consumers were advised that seeking professional advice before committing to such an undertaking was important.
Debt consolidation is a way of simplifying what a person owes – and the website noted that it is not the ideal solution for everybody.
Making one monthly repayable loan out of all a person's existing arrangements could take some of the confusion out of balancing arrears, but consumers were warned that it is unlikely this will improve a person's circumstances as they will still need to be able to afford to pay the loan back.
The website noted that those who do not think they can consolidate all of their unsecured debts, or workers who cannot rely on a consistent monthly income should look at other avenues before considering debt consolidation seriously.
In addition, those who opt for a debt consolidation loan will be aware that if they opt to make smaller, more manageable repayments each month, it will take them longer to be debt free – however most people are willing to accept this trade to get a hold of their financial matters.
Last month, a poll by MyVouchers.co.uk highlighted that tough times have been hard on consumers – and debt consolidation could be one way consumers help free themselves from the debts incurred to afford the cost of living.
By Joe White
Posted in Creditor Behaviour, Debt Management, Personal Debt | No Comments »
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