March 2008 Archive
Posted on March 31st, 2008 in Debt.
Millions of Britons look set to cut down on their basic expenditure in an effort to avoid financial problems in the wake of the credit crunch, according to new research
Debt management is becoming increasingly difficult for many thousands of families and most are now expecting to make cut backs to keep on top of their finances, MoneyExpert reports.
A study by the price comparison firm found that almost a third of consumers around the country plan to reduce the amounts they spend on going out, while the same proportion intend to cut their clothes shopping budgets.
Sean Gardner of MoneyExpert commented: "The credit crunch is moving on from being something that just affects bankers to having real effects on real people in the real economy."
The report from the price comparison firm went on to suggest that consumer who are struggling to manage their money should focus primarily on paying off any debts they have outstanding.
Last week, Abbey reported that the credit crunch has led to almost a quarter of a million UK consumers worrying for more than 24 hours each week about the state of their finances.
Posted on March 31st, 2008 in Debt.
Use of credit cards is rising among consumers around the UK even as borrowing is becoming more difficult, according to a recent study.
Figures compiled by Fool.co.uk have shown that close to a third of all Britons now use their credit card for the purchase of everyday items and that older generations tend to prefer paying in cash.
Reflecting on the findings of the research, David Kuo, head of personal finance at Fool.co.uk, suggested that the growth in credit card use is symptomatic of the increasing ease with which Britons use debt.
"Plastic can be fantastic but relying on money we can’t see is a reflection of how easy it has been to rely on credit in recent years," Mr Kuo remarked.
Meanwhile, figures released recently by unbiased.co.uk showed that it takes around 70 days of work for people in the UK to meet the interest repayment demands on their collective debts.
Posted on March 31st, 2008 in Bankruptcy.
The former owners of a hotel in the north-east of England had almost £1.2 million in debts outstanding when they were finally declared bankrupt, according to reports.
Despite only running Skinburness Hotel in Silloth for a year, Adrian Moore and his wife Vanessa Taron Moore managed to accumulate almost £40,000 in credit card debt, £350,000 in mortgage arrears and £77,000 to other creditors.
The details of the couple’s finances were revealed during their bankruptcy court case the hotel, which was first established in the 19th century, was repossessed by the Abbey National Bank, reports the Cumberland News.
"Running the hotel was to be our dream project but it turned into a nightmare for us," said Mrs Moore.
Financial problems relating to the property were contributed to considerably by the loss of tourism trade during winter months and the costs of renovations that had to be made under the terms of fire safety regulations.
A report from the accountancy firm KPMG in December of last year predicted that this year would see a record number of people around the country enter insolvency such as bankruptcy.
Posted on March 28th, 2008 in IVA.
There has been an increase in the number of "high-flying professionals" seeking individual voluntary arrangements (IVAs), an expert has asserted.
Director of comparison and advice website Iva.com Terry Balfour made his comments to the Scotsman newspaper, highlighting that there has been a "significant" increase in insolvency queries from people who earn higher-than-average salaries.
He told the publication that the average level of debt is about £25,000 but that some people have approached his organisation because they are considering the route for debt of just £6,000.
A number of property developers, accounts, lawyers and bankers are now considering IVAs as a route out of their problem debt, Mr Balfour continued.
"The level of contact from people whose finances would usually be regarded as watertight indicates just how pervasive the current crisis is and points towards more casualties to come throughout the year," he added.
Research conducted last year by CreditExpert.co.uk found that five per cent of the population have considered or entered insolvency – either bankruptcy or the IVA alternative.
Posted on March 28th, 2008 in Debt.
The previous availability of easy money and credit has contributed to the market issues the British economy faces today, the Conservatives have claimed.
Leader of the opposition David Cameron also warned that there has been a steep rise in the cost of living, leaving some Britons struggling to cope.
The last ten years have seen the liabilities of homes, firms and financial institutions rise and debt levels have increased "unsustainably", he continued.
"As the tide of debt-fuelled growth recedes, we are now seeing the rocks exposed: the rocks of an economy that is in no fit state for the twenty-first century," Mr Cameron added.
Borrowing advice charity Credit Action reports that at the end of January, total personal debt in this country stood at £1,412 billion – an increase of £113 billion on the previous year.
It notes that the average amount owed, including mortgages, by every British adult is £29,747.
