New Year is “absolutely the right time” to manage debt

The New Year is “absolutely the right time” for consumers to start managing their debt and personal finances, according to a debt consultancy firm.

Thomas Charles has said that while taking control of money worries is difficult in December, the New Year is a good time to turn over a new leaf when it comes to saving.

James Falla, director of Thomas Charles, said: “The first thing people have to do is to understand their budget.”

“It’s quite a simple thing but understand what money is coming in and what money is coming out, so you can work out yourself what you should be spending,” he advised.

The latest research from the firm, which was carried out in conjunction with YouGov, revealed that 15 per cent of Britons are in ’serious’ debt to the tune of £10,000.

Men are thought to be more in debt than women although this is an attitude which is changing.

Tags: conjunction, thing, time, finance, director, control, consumers, research

Online shoppers one step ahead in the Christmas sales

An estimated 60 per cent of consumers used the internet on Christmas day to pre-empt the festive sales, say industry experts.

According to a survey of over 2,000 shoppers, the Post Office said that one in five of festive online users would make a purchase over the internet.

Post Office Broadband manager Stewart Fox-Mills, said: “Whereas families traditionally fought over the TV remote control on Christmas Day, the growing popularity of computers and the internet means more people will be fighting over the mouse this year.”

Marks & Spencers launched its online sale at midnight on Christmas day and reported busy trading into the early morning.

The retailers reported particularly busy trading between midnight and 1am.

Meanwhile, shoppers are still expected in the shops in the traditional post-Christmas sales.

Industry experts are expecting some retailers to offer discounts of up to 70 per cent in an attempt to make up the slow build-up to the festive period.

Tags: post office, control, day, christmas, step, Fox, morning, online sale

Consumers need to spend carefully at Christmas

Consumers should be careful with their Christmas spending and ensure they do not put more than they can afford to pay back on credit, warn financial experts.

The Consumer Credit Counselling Service has said, that despite it being the festive season, people still need to remember that money spent on credit has to be repaid over the course of the year.

James Ketchell, spokesperson for CCCS, said: “The amounts you put on for Christmas spending might be done in good faith and for good reasons, but they do have to be measured by common sense too.”

CreditExpert.co.uk has predicted that, despite recent interest rates rises and the credit crunch, the majority of Christmas consumers will not be reducing their spending.

The news comes even though 29 per cent of respondents admit money is tighter this year.

According to statistics from Credit Action, the total personal UK debt stood at £1,380 billion at the end of September.

Tags: spending, sense, News, statistics, year

‘Unattractive’ interest rates increase premium bond popularity

Unattractive interest rates are responsible for the increase in the popularity of premium bonds, claims an asset management company.

Mark Dampier, head of research at Hargreaves Lansdown, said the tax free returns from premium bonds have also helped make them more attractive.

“It is based partly on the fact that interest rates had gone down so far that people stared to think: ‘Why not have a bet in the premium bonds’?” he said.

He added that premium bonds are popular with self-employed people started to take advantage of the tax free benefits.

“If you are lucky enough have quite a lot of money, premium bonds are often a port of call. You don’t have to put them on an income tax return form,” added Mr Dampier

From August 1st 2005 there were two £1 million jackpots drawn each month and, at the current odds, over a million other cash prizes. The winning bond numbers are selected at random each month.

Tags: lot, Business Finance, Lansdown, cash, odds

Pensioners increasingly in debt

Despite the credit crunch, borrowing levels have continued to rise and debt levels are increasing with the over-55s being the worst offenders, according to financial experts.

Research from Callcredit reveals that the elderly are the most uncertain about their future with 16 per cent of respondents over-55 financially unaware and unable to define their debt levels.

As a result the pensions gap is continuing to increase, claim the organisation.

Mark Ward, consumer debt expert at Callcredit, said: “It is essential that people start to borrow more carefully in order to avoid having to owe more than we are able to pay back.”

Over 1.5 million of those aged 55 and over claim they can’t afford to retire at state retirement age due to a lack of pension savings.

Another 1.1 million retired homeowners in the UK have outstanding mortgage on their home, with an average debt of £38,000.

Callcredit is a consumer credit reference agency and forms part of the Skipton Information group.

Tags: reference, information, United Kingdom, Banking, lack, finance, 1 million, Labor

Lending to get tighter in the New Year

The effects of the credit crunch will see lenders “tightening up” and looking at minor misdemeanours which may well have been ignored in the past, claim financial experts.

Equifax has said there could be an increase in the number of loan applications in the New Year, as lenders look more carefully at a person’s payment history.

Neil Munroe, external affairs director for Equifax, said: “Any negativity that might not have been a problem in the past might rise in prominence.”

He also warned consumers that an increase in the number of applications within a short space of time can look suspect.

Repeated searches on a consumer’s history have the potential to affect a person’s credit rating.

The latest figures from Credit Action show that total consumer credit lending to individuals in October 2007 was £222 billion. This has increased 5.8 per cent in the last 12 month.

Total lending in October 2007 grew by £8.8 billion.

Tags: finance, economics, Credit Action, claim financial experts, personal finance, time, equifax, credit

Speculative property investors hit by oversupply

The oversupply of flats will have the biggest impact upon those “who have just gone in for the speculative investment” says an industry expert.

Landlordzone.co.uk has said that while established landlords who invest in property as a business could profit from falls in house prices, “the people who have gone into this more recently” will be the ones “who suffer”.

Tom Entwistle, editor of www.landlordzone.co.uk said: “The problem now is that because people [landlords] are desperate, they will lower their expectations of tenants, and will go for a lower quality of tenant.”

“That has a snowball effect because it means people will struggle to let and that could destroy the quality of the whole development,” he added.

Consumers invested in property thinking prices were going to continue rising but this has not happened, concluded Mr Entwistle.

His comments arrive after the Royal Institution of Chartered Surveyors reported that the demand for flats has fallen due to “an oversupply in the market”.

Tags: rent, expert, landlordzone, Royal Institution of Chartered Surveyors, property investors, royal, www.landlordzone.co.uk, market

Bank has a ‘difficult’ decision to make in slow economy

With inflation rates expected to “creep up over the course of next year” the Bank of England has to make a “difficult decision about interest rates”, according to industry experts.

The Confederation of British Industry (CBI) has said that the combination of inflationary pressure at a time when the economy is slowing will force the Bank to make a decision on what action to take.

Lai Wha Co, principal economist for the CBI, said: “On the one hand it’s monitoring how sharply the economy might slow, but on the other hand it has to weigh up the concerns about inflationary risk.”

She added that if inflation was to rise more markedly than the market forecast then the Bank’s members may be constrained.

The cuts in interest rates that some consumers were hoping for may not be delivered Ms Co concluded.

The CBI has predicted that inflation will rise during 2008 due to the higher price of oil, gas and food.

Tags: interest rate, economist, industry experts, forecast, decision, time, Monetary Policy Committee, hand

Joint mortgages with strangers are ‘risky’

Entering into a joint mortgage with someone you do not know is “extremely risky,” say mortgage experts.

Bestinvest has said home buyers could also find themselves “in all sorts of problems” if they enter into a mortgage with a friend who they fall out with.

Peter O’Donovan, mortgage manager at Bestinvest, said: “If you buy a house with someone and you don’t know their credit record, that’s even worse because you are jointly and solely liable for that mortgage. If the other person stops paying you have to continue.”

He added that there is no protection that people entering joint mortgages can take out to protect themselves against defaulting if the arrangement does not work.

According to research conducted by Scottish Widows in July 2007, joint mortgages are becoming popular among graduates who find that they offer the only way onto the property ladder.

Of those graduates surveyed 63 per cent purchased property with a partner.

Tags: partner, Joint, manager at Bestinvest, loan, record, property ladder, way

Consumers expected to spend £2.7b more this Christmas

An estimated £2.7 billion more is to be spent this Christmas by consumers compared with last year, according to a survey by Sainsbury’s Bank.

People intend to spend £11.85 billion more on shopping in the last week before Christmas than in 2006.

The findings also show that 18 per cent of this figure, approximately £2.1 billion, will be paid by credit card.

Donald MacLeod, head of cards, Sainsbury’s Bank, said: “I was surprised at…the fact that people were going to spend more this year than last year. All the press comment at the moment has been about there being a squeeze on [spending], but this doesn’t appear to be the case.”

He added that buying gifts during the build up to Christmas can benefit consumers as some retailers are already offering discounts. Unfortunately the risk is that some goods may already be out of stock.

Mr MacLeod also said that credit cards are “a very convenient way of doing your Christmas shopping”, as using them does not require consumers to carry cash.

Tags: year, Sainsbury, press, Retailing, sainsburys, week before christmas

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