February 2008 Archive
Posted on February 29th, 2008 in IVA.
Britain is a nation facing rising levels of personal debt but decreasing levels of savings, an expert has claimed.
Chris Cummings, director general of the Association of Independent Financial Advisers, told online resource Money Marketing that it is vital consumers are offered professional financial advice to overcome that.
With advice, Britons could reduce their personal debt by a national total of almost £30 billion, the adviser stated.
The association’s research also suggested that "within four years of low to medium income population groups receiving financial advice – and only one in ten acting on it – new contributions to medium-term savings plans would increase by £1.5 billion," he said.
Debtors who are keen to reduce their own personal debt levels have a number of options open to them, including debt management, individual voluntary arrangements – usually called IVAs – and debt consolidation.
With an IVA, any money still owed at the end of the fixed period can be written off.
Posted on February 29th, 2008 in IVA.
Years of easily-available credit have left many Britons keen to spend "tomorrow’s money today", an expert has warned.
Cliff D’Arcy, a commentator for financial advice website Fool.co.uk, suggested that credit has become an "ingrained" aspect of life in Britain.
In fact, the country’s debt burden has never been greater, he warned.
Before a person can get themselves out of debt, they must understand the total, Mr D’Arcy continued.
He urged: "Begin by bringing together all of the paperwork relating to your debts. Find the latest documents regarding your credit and store cards, car and personal loans, overdrafts, store finance agreements and so on."
Then, debtors should throw as much money as they can at their borrowing, beginning with the most expensive, the personal finance expert concluded.
However, when they list all their borrowing, some debtors may find that they cannot afford to maintain the amount without refinancing.
One option for those facing such problem debt is an individual voluntary arrangement, or IVA, an agreement which allows them to repay an affordable monthly sum for a set period.
At the end of that period, any remaining debt can be written off, setting the person debt-free.
Posted on February 28th, 2008 in Debt.
As people find it harder to borrow, there will be an increase in the numbers turning to higher cost credit, an expert has warned.
Chris Tapp, director of Credit Action, said the economy will slow over the rest of the year and this is likely to reduce borrowing levels generally.
However he warned that as banks and credit cards become choosier about the consumers they are prepared to lend to, people "are forced to look elsewhere for higher cost alternatives, if they really do need to borrow".
Recently, Citizens Advice warned that Britons are increasingly concerned about their debt levels, citing a rise in the number of people seeking help at its bureaux.
It revealed that debt is the main subject on which its experts now offer advice, with one in three enquiries relating to financial problems.
The charity warned that "many hundreds of thousands of people" are finding it hard to meet their day-to-day living expenses.
Posted on February 28th, 2008 in IVA.
British consumer debt issues are not as severe as they were in the early 90s, an income specialist has claimed.
Chris White, of Threadneedle, made his comments to the Citywire news resource, predicting that consumers could still face a difficult period as the country "flirts" with recession.
However, he suggested that wider economic factors make it unlikely the country will experience the problems it did during the last decade.
While Mr White’s words may reassure many, those debtors who are already experiencing problems because of the credit crunch may be less optimistic.
For some households, the rising cost of debt means they can no longer refinance their credit and is squeezing their income.
There are many options to those struggling to cope, one of which is an individual voluntary arrangement, more commonly known as an IVA.
Such agreements are made through the courts and allow debtors to make an affordable monthly payment for a fixed period, at the end of which any remaining debt can be written off.
Posted on February 28th, 2008 in Debt.
One in seven first-time buyers are helped onto the property ladder by their parents, a new report has revealed.
A study by Abbey has shown that British parents have spent a collective £27 billion helping their offspring afford their first home, with an average contribution of almost £6,000.
One in 16 first-time buyers borrow money from the parental purse in order to afford their home, it noted.
The average amount parents lend to their children for house buying is just under £20,000.
Nici Audhlam-Gardiner, head of Abbey Mortgages, said "most parents" are keen to help with their child’s first home.
"Because house prices have increased so much over the past few years, buying that first home is also a bigger and more daunting investment than it was for the previous generation," she added.
Scottish Widows released research earlier this week which showed adult children are costing their parents thousands of pounds which they had intended to use for their retirement.
