Consumers rely on lottery in case they lose their jobs

Whilst a huge number of us buy lottery tickets every week in the hope of hitting the jackpot or at least securing something substantial, the chances of actually winning big are minute and for the majority of us will never happen. However, despite this, recent research has revealed that there are many people who are hoping that a lottery win will sort them out financially in the event that they lose their jobs.

Worryingly, a large number of people now have no insurance in place to protect their income in the event of a job loss and are instead looking at other options to tide them over financially, with some stating that they would use savings, others relying on family and friend to help them out, and some relying on a lottery win to ensure that they can get by if their income is suddenly cut off.

The research was conducted by British Insurance, and according to the results, around 59 percent of workers were worried about the security of their jobs, which equates to around 17 million workers. This figure reflects an increase of 7 percent compared to the survey last year. However, fewer people now have any protection in place, with 20 percent of workers having protection in place last year but only 14 percent having protection according to this year’s survey.

One official from the company said: “Although we’re told the UK is coming out of a recession, this confidence is clearly not shared by the majority of workers. And with economists predicting that the economy will stagnate over 2012 or suffer a deep recession if the eurozone situation deteriorates, it’s advisable to have a plan to replace any future lost income without dipping into savings or falling into debt.”

Tags: recession, Gambling, eurozone, future, Recent research, survey

More people rush to fix their mortgages

It has been announced that a rising number of homeowners are rushing to fix their mortgage rates amidst fears that the base interest rate could shoot up over the course of this year. With inflation having rocketed to nearly double the target set by the government there are concerns that the base rate will have to be increased in order to bring inflation down to a more acceptable level.

With the speculation and rumours over when the base rate will increase many homeowners with variable rate mortgages are now getting concerned, and are flocking to try and get their mortgage rates fixed. As a result of this surge in demand many lenders have been pulling their cheapest deals and replacing them with more expensive ones.

There are concerns that inflation is set to soar even higher, and the shocking increase in the cost of living has sparked panic amongst homeowners who are now worried that interest rate increases are set to send repayments rocketing. Some economists expect inflation to rise to a staggering 5 percent within a matter of months, which would force the Bank of England and the Monetary Policy Committee to start increased interest rates. This would then impact on repayments on mortgages, and could tip many homeowners over the financial edge.

One mortgage broker said: ‘People will rush to fix because they’ve probably been worrying about interest rates for a while. It is inevitable that more people will fix because rates are expected to start rising.’

Around two thirds of homeowners currently have variable rate mortgages. However, a fixed rate mortgage offers the security of static repayments for the period of the fixed term, which will remain the same even if interest rates increase.

Tags: while, rate, bank of england, term, interest rate, base interest rate

Surprise interest rate rise

The Bank of England has stunned economists by raising the interest rate to its highest level for six years.

In the build up to the decision being announced, it was considered by almost everyone in the industry that the rate would be held.

However, on Thursday January 11th, it was announced that the interest rate would rise by 0.25 per cent, taking it to 5.25 per cent.

It is the third time since August that the Bank of England has increased the rate by 0.25 per cent and is bad news for people with mortgages.

“This is another rise in a short period of time that could hit some homeowners hard,” said Peter Tutton from Citizens Advice.

“We are already seeing a rapidly growing number of people falling behind with mortgage payments and in some cases threatened with repossession, and we know some people are taking on mortgages that stretch them to the absolute limit.

“Any increase in mortgage interest rates could spell disaster for people whose finances are balanced on the very edge of affordability,” he added.

The rate rise is good news for savers however, although the uncertainty created by today’s announcement is unstabling for most people.

“Markets are going to be wondering if this marks a more intensive process of monetary tightening,” Peter Dixon, economist at Commerzbank, told Reuters.

“Is the bank going to raise again? That’s the question that is going to be ringing round the dealing rooms this afternoon.”

Tags: absolute limit, today's announcement, economists, limit, Federal Reserve System, highest level, homeowners, advice