Debt affecting the lives of many students

There is little doubt that the high levels of debt that students have to get into in order to get an advanced education have affected their abilities to do many things in life. For many people that leave university with high levels of debt the next decade or more could be spent focusing on repaying the debt, with everything else having to be put onto the back burner.

A study that was recently carried out has revealed the extent to which many students are having to put their lives on hold in order to focus on their student debt after leaving university. As a double whammy, many now not only face the prospect of having to spend over a decade repaying their student debt but also face very bleak prospects of getting a high paid job because of the current climate.

Uswitch.com carried out research to show how many students are having to put their lives on hold in order to repay their student debt. Over 30 percent had been unable to start a pension when they wanted to according to the reports and nearly 50 percent had been forced to put off buying a home. Nearly 60 percent of students had been unable to save money because of their debts and close to 30 percent had delayed plans for marriage.

One industry official said: “The fact that graduates have to put their life on hold because they are knee deep in student debt is a sorry state of affairs. And as fees go up, students risk running up even bigger debts. But without a degree, getting a job in today’s stagnant market may be even harder.”

He added: “Going to university used to be the norm, but it is now becoming a catch 22. It is also worrying that students are going to university blind to the financial implications. Higher fees and lack of job prospects may be out of your control, but if university is right for you it’s more important than ever that you are as financially prepared as possible.”

Tags: Higher fees, Student loan, official, debts, Financial services, fact, life, study

Smokers face double the life insurance premium

Smokers may be faced with life insurance premiums that are twice as high as those for non-smokers, says an expert.

In particular, older people who smoke can expect a large reduction in the price of their life insurance if they quit, according to Life Direct.

Kieran Platt, director of the insurance information provider, said: “If you smoke it can double your premium quite easily. Smoking massively affects life cover premiums and that affects our lifestyle.”

A survey by Norwich Union from March 2008 found that 37 per cent of people without life insurance said that they either had not considered it or were intending to buy it eventually.

Ten per cent of respondents said they had no dependents and therefore felt no need for insurance, while as many as 44 per cent decided to buy cover after they bought their first home.

Mr Platt also said that taking part in clinical trials may impact the cost of life insurance, particularly if they are for an untested drug as companies are unlikely to be willing to pay insurance in that situation.

Tags: cost, insurance information provider, lifestyle."A survey, home.mr platt, director, life, information, Insurance

Women urged to think of pensions early

Women need to pay particular attention to their financial futures, because pension arrangements often work to their disadvantage.

With longer life expectancy and a greater likelihood of taking extended breaks from working during their lives, women need to think about pension saving even earlier than men, NFU Mutual has warned.

The insurer cites data from the Official for National Statistics, showing that in 2002, the average value of pension funds of men aged 50 to 54 was £116,000, compared to just £60,000 for women of the same age.

“Really the solution is simple: women should take full advantage of the tax relief on offer to build up a decent pension to provide through what will hopefully be a long retirement,” urged pensions specialist Shelagh Hamer.

“Don’t put off pension planning. By starting to fund a pension early, you have a much better chance of building up a sizeable fund for your retirement. Also, regularly review your arrangements to make sure they are in tune with any changes in your career and lifestyle.”

Tags: National Insurance, longer life expectancy, personal finance, Don, GBP, official

Average Brit ahead of international average when saving for retirement

A new survey published today shows that the average British consumer begins planning for their retirement up to five years ahead of the international average.

According to findings from AXA, Brits start saving for their post-work future at 28 years-old, compared with workers in France and Spain who do not start planning for life post-work until they are 34.

Up to three in four (71 per cent) of working Brits have started preparing for their retirement financially, a percentage higher than the global average of 54 per cent.

Steve Folkard, head of pensions and savings policy at AXA, said: “It is encouraging to see that Brits lead the way when it comes to retirement planning but not surprising given that state benefits in the UK provide a very modest retirement income compared with many other countries.”

The research also shows that people have found alternative ways to save for the future.

New methods include opening personal pension schemes (45 per cent) and putting money aside in equities and bonds (45 per cent).

Meanwhile, the Policy Exchange has warned that the pension crisis is worse than originally feared as it faces a perfect storm.

Tags: income, Labor, Financial economics, Termination of employment, spain, life, head of pensions, modest retirement income

Tips offered on mortgage protection

Don’t borrow more than you can afford and seek independent advice before buying are just two of the mortgage protection tips offered by industry experts, LifeSearch.

The guidance arrives as consumer confidence has been affected by the Northern Rock crisis. Interest rates are also near a six-year high at 5.5 per cent, despite coming down last week.

Matt Morris, LifeSearch policy adviser, said: “Many people consider protecting their mortgage, but they usually select a policy that will pay it for them when they can’t work.”

He added that what they actually should be protecting is their income, which not only pays the mortgage, but also pays all the other bills and the everyday cost of living.

LifeSearch also advises consumers to check employee benefits, not to buy Mortgage Payment Protection Insurance without considering Income Protection and ultimately take some form of action.

LifeSearch is a life insurance and protection specialist which was established in 1997. It currently has over 200,000 customers and more than £13 billion worth of cover arranged.

Tags: week, Financial economics, Many people, high, Matt Morris, specialist

Student finances not ‘greatly’ affected by credit crunch

The National Union of Students (NUS) has announced that finances for this year’s intake of students were not ‘greatly’ affected by the credit crunch.

A spokesman for the NUS said that there has been little evidence to suggest that banks are overly worried about students.

He said: “The risk outlay on students is that much less than for giving out a mortgage and they also take the view that a graduate is likely to be a customer for the rest of their life and they are willing to take that risk.”

HSBC’s adding of interest to graduate accounts is the only evidence of a tightening of credit he commented.

Statistics published by the Office for National Statistics show that the maximum amounts available to new students in 2007-8 are 76 to 85 per cent higher than they were ten years ago.

The NUS is a voluntary membership organisation comprised from student representative organisations in colleges and universities from across the UK and Northern Ireland.

Tags: finance, life, office, economics, National Statistics

Wrong insurance costs Brits £750 million

Having the wrong insurance cost Britons £750 million in the last year, according to new research.

The figure is the sum total of the value of claims people who had lost cars, holidays and other possessions which they thought were insured, but which turned out not to be covered by their policies.

One million people had claims rejected, with an average value of £736, the research from Tesco Personal Finance found.

The company also found that 55 per cent of insurance buyers only skim read the terms of their policies.

Peter Dingle, managing director at TescoCompare.com, said: “It is worrying that so many of us have made mistakes in the past twelve months. With the pace of modern life, many perhaps simply do not have the time to make sure they understand what they are buying.”

Mr Dingle’s comments are borne out by other findings in the research.

Four and a half million shoppers were found to have bought an item of clothing in the last 12 months only to find out later that it was dry-clean only.

Tags: cost, research, possessions, life, britons, Brits, Financial economics

Data loss puts thousands at risk

Thousands of Standard Life customers could be at risk of identity theft after their personal details were lost.

The details of around fifteen thousand Standard Life customers were being sent on CD from HM Revenue and Customs to the Standard Life headquarters in Edinburgh. This is a routine process carried out by HMRC. However, the courier lost the CD on this occasion, and it never arrived at the company’s headquarters.

Officials from Standard Life and HMRC are now warning customers to be vigilant. The data related to pensions customers, and amongst the information about each consumers was their National Insurance number, their names, their dates of birth, and their pension plan numbers. The CD was sent and lost around a month ago state officials. Reports also claim that a second CD with consumer information has gone missing, but it is not yet known which company this second CD was meant to go to.

The customers at risk have now been sent letters from Standard Life and HMRC. However, this is almost five weeks following the loss of the data, which has resulted in criticism.

One customer expressed her concern over the delay in notifying customers of the breach of security, stating: “This happened at the end of September and it is a month before notification. They are saying that addresses were not on there, but if someone has your surname and date of birth it is not that difficult to track you down.”

An official from Standard Life stated: “We have no evidence that the disc has fallen into third party hands and we have also been closely monitoring all the accounts and have seen no indications of any suspicious activity.”

Mark Wright
8th November 2007

Tags: standard, data, stolen, lost, information, security, personal, life

Figures show increase in bankrupt pensioners

Recent figures have shown that the number of pensioners in the UK that are going bankrupt has doubled in the space of five years.

There are now twice as many pensioners declaring themselves bankrupt as there were five years ago according to the figures. In the past year around 7% of bankruptcies were made up of pensioners, but in 2002 the number of pensioners that made up total bankruptcy figures equated to just 2% according to records.

Some experts have stated that it is increased life expectancy that has had an impact on the finances and savings of pensioners, tipping many over the financial edge and resulting in bankruptcy. This, state experts, has been made worse by the rises in the cost of living, fuel, and other areas, which has put further strain on pensioners’ finances. The research also shows that there appear to be more pensioners going bankrupt in rural areas compared to urban areas.

One insolvency expert stated: “More and more pensioners are going bankrupt as they struggle to repay debts when their pension is their sole source of income. Although attitudes towards bankruptcy have changed dramatically since the days of debtors’ prisons, the older generation still feel the stigma of bankruptcy and are reluctant to ask for help until it’s too late.”

Around 1250 bankrupts around the UK took part in the research. It is thought that the reason for the higher concentration of bankrupt pensioners in rural areas is the result of fewer work opportunities and higher transportation costs.

Some industry officials state that the cost of food – on which many pensioners spend a large proportion of their income – is contributing to the financial strain faced by many in this age group. Food price inflation rose from 2.5%in July to 2.8% in August according to figures.

Tom Smith
3rd November 2007

Tags: longer, bankrupt, debt, pensioners, bankruptcy, costs, money, life, age, finances

Life insurance with mortgage ‘good for parents’

People with dependants are advised of the benefits of getting life insurance when taking out a mortgage.

According to Key Financial Consultants Ltd, many first time buyers neglect to take out life insurance due to other expenses.

It advised that, as life insurance is cheaper the younger the applicant, it would be beneficial for people to take it out when getting a first mortgage.

Managing director of the independent financial advisory firm, Dominic Mansley, commented: “If it’s a single person looking to buy a flat by themselves, and they’ve got no dependants, then we wouldn’t really worry about a lack of life cover.

“However, if it’s a young family with children then we would very much make them aware of the need for [life insurance].”

Furthermore, he said, if people fail to take out life insurance along with their mortgage, they do not tend to take it out later.

The Association of British Insurers states that as many as one in every three Britons does not have life insurance.

Tags: Key Financial Consultants Ltd, person, family, life, Consultants, three britons

Veggies can now get great deal on life insurance

Life insurance premiums can vary from one insurance company to another, but the cost of premiums is based upon your circumstances, medical history, and lifestyle.

In the past, we have all learned that those that smoke, those that are morbidly overweight, and those with certain medical conditions will pay more for life insurance because it makes them high risk. Healthy individuals that do not smoke, do not drink to excess, and are not overweight, however, can enjoy lower premiums.

There is now an insurance policy that takes it one step further, and offers discounted premiums to those that do not eat meat. Vegetarians and those that eat only fish and no meat can enjoy lower premiums with the life insurance cover that is available through Animal Friends Insurance. The company, which is a non-profit organization that deals with pet insurance, has got together with Liverpool Victoria in order to offer the special life insurance deal.

According to the company there are around 3.5 million people in the UK that are either vegetarian already or are planning to give up meat in the next year or so. The term life insurance on offer from Animal Friends and Liverpool Victoria will offer a 6% discount on premiums to vegetarians and fish eaters.

One official from the company stated: “The risk of vegetarians suffering from some cancers is reduced by up to 40 percent and from heart disease by up to 30 percent, but despite this they have to pay the same life insurance premiums as meat eaters. We believe this is unfair and the life insurance industry needs to acknowledge the fact that being a vegetarian can have a very positive impact on life expectancy and reduce premiums accordingly.”

Tom Smith
19th September 2007

Tags: vegetables, good, healthy, exercise, lifestyle, Insurance, vegetarians, life

The importance of honesty for insurance customers

Many consumers in the UK take out life insurance policies each year, and taking out this type of policy usually involves providing the insurance company with a variety of details about your health and lifestyle.

The cost of this type of insurance cover can vary depending on the company that you go through, as well as on the details that you provide to the insurance company with regards to your health and lifestyle. It is thought that a certain percentage of shoppers may miss out or change vital information in a bid to get cheaper premiums, but experts warn that this could end up being a waste of money as the information that they provide – or fail to provide – could invalidate their cover in the event that a claim needs to be made.

One independent financial adviser has warned that consumers must ensure that they provide up to date information that is accurate and honest when they are applying for life insurance to ensure that their premiums are not wasted altogether.

This includes providing accurate information on their lifestyle, such as their smoking and drinking habits and also any dangerous pastimes or hobbies that they may have. He added that if a claim is made and the insurance company discovers that important information was withheld, or that the applicant was not truthful, then the company is not obliged to make a payout despite receipt of insurance premiums.

He said: “All life insurance policies are underwritten at outset. So if you don’t partake in, say, climbing or mountaineering when you apply for your policy, but then subsequently you do, then that’s fine, nothing wrong with that. But whatever the situation is when you apply for your policy, you must be totally honest, otherwise you may invalidate your claim. The insurance company won’t pay your claim if they found out you lied to them when you filled the form in. People have got to be totally honest when they fill their applications in.”

Tom Smith
28th August 2007

Tags: Insurance, cover, honesty, travel, life, claim, car, company, accident

Gay applicants “fairly treated” by life insurers, says ABI

The infamous ‘gay question’ during life insurance applications is no more, the Association of British Insurers (ABI) reassured consumers today.

Whereas previously, applicants had been asked point-blank to specify their sexuality, the ABI has moved to confirm that, under a statement of best practice implemented in 2005, a more non-specific question regarding HIV status is asked.

Claimants are also reassured that any past negative tests they might have taken will have no bearing on their life insurance.

A spokesperson for the association said that “it’s possible that there has been a perception that applications were not treated in the same way in the past, but now no longer do people have to disclose…what their sexuality is.”

“There is government legislation now which means that you don’t have to disclose whether you’re in a civil partnership, so there can be no way that the insurance company knows what your sexuality is.”

Many gay men had felt unfairly treated by the question, which implied that their sexuality posed an inherent insurance risk, providing the impetus for the reform.

Tags: question regarding hiv, past, life, Association of British Insurers, risk, education, perception, question

Smokers lose money on insurance premiums

Most smokers realize that by kicking the habit they could save a fortune each year, with many smokers spending thousands of pounds each year on cigarettes.

However, many forget that in addition to saving money on the cost of cigarettes, which can then be used for anything from luxury holidays to investments for the future, they can also save money in areas, one of which is insurance.

There are many different types of insurance cover, and the main ones on which smokers can save money include medical or health insurance cover, life insurance cover, and home insurance cover.

Smokers are classed as an increased risk when it comes to these types of insurance cover, and as a result of this increased risk most smokers pay considerably larger premiums than non-smokers, which adds to the overall cost of being a smoker.

When it comes to medical and health insurance, smokers are more likely to make a claim because of the health risks and illnesses associated with smoking, and therefore have to pay higher premiums. With life insurance, smokers are more likely to contract a terminal illness such as cancer due to smoking, and again as a result of this the cost of premiums are pushed up.

And in terms of home insurance, smokers are classed as an increased risk when it comes to fires in the home, and this also pushes up the cost of insurance premiums.

It is also thought that the number of people in the UK smoking in their homes, and therefore being classed as an increased fire risk, will increase, as the smoking ban in public places has now come into force in the UK.

Although many smokers now aim to give up altogether, which could boost their finances in many areas, many others will resort to staying in and smoking in the home rather than going out to pubs and clubs where they can no longer smoke.

Tom Smith
5th July 2007

Tags: increased, more, life, risk, finances, clubs, house, homes, smokers

The changes brought about by debit cards

The debit card turned 20 on June 3rd and the banking industry has been looking back at how our lives have changed as a result.

Apacs, the UK payments association, has released a report called 20 Years of the Debit Card and it highlights how the cards have allowed our lives to alter in the past two decades.

Barclays was the first UK bank to provide customers with a debit card back in 1987 and 20 years on, 84 per cent of the adult population now owns one.

A total of 41 million people hold a debit card, a massive increase on the 27.8 million who had one in 1996.

The popularity of debit cards continues to grow, with Brits spending £194.9 billion on their cards in 2006, five times what we spent on them in 1996.

“It’s hard now for most of us to remember what life was like before the debit card, as it’s become one of those things we’re unlikely to leave home without,” said Jemma Smith from Apacs.

“Before 1987, most of us were totally reliant on cash or cheques, and although credit cards were used in supermarkets at that time, they only made up six per cent of transactions.

“Today, cards account for 66 per cent of supermarket spending, and most of this is on debit cards. In fact, over a third of all debit card transactions are made at the checkout,” she added.

It seems that debit cards will continue to be popular among consumers in the years to come, with spending on them expected to reach £400 billion by 2016.

Tags: MasterCard, massive increase, apacs, Jemma Smith, payment, cash, life

Brits: Debt below £15k is not a concern

Millions of Britons are unconcerned by their growing levels of debt despite recent interest rate rises.

According to the Personal Credit Index survey from CreditExpert.co.uk, six million people would remain unconcerned about their debts if they stayed below £15,000.

That figure does not include mortgages and a further 1.4 million Britons would be happy to rack up £50,000 in debt before becoming concerned.

This is all adds up to a growing level of confidence among Brits, with Experian, the firm behind CreditExpert and the survey, saying that consumer confidence is currently at an annual high.

“The fact that so many Brits are happy with unsecured borrowing of at least £15,000 may seem shocking on first sight but the credit-comfy generation seems to have become anaesthetised to the real implications of mounting debt,” commented Jim Hodgkins, managing director of CreditExpert.co.uk.

“With the current rise in interest rates, many will find that debt they blithely ignored is in danger of spiralling out of control.”

In spite of our apparent apathy towards debt, the survey showed that it remains something of a social taboo.

One in ten of those questioned claimed that their debt problem is their most socially embarrassing life event, putting it well above getting a divorce or being caught using illegal drugs.

Tags: rack, sight, life, Personal Credit, britons, firm, real implications, debt

Is Travel Insurance Needed?

In the last five years, more and more people are travelling to further distant regions and not buying travel insurance. Is travel insurance needed? The lust for adventure and need for a challenging life may be strong, but insurance is still necessary. Every year in the UK and overseas, natural disasters have occurred where lives ended in tragedy. Read more

Tags: travel insurance, early 20, types of personalities, trip, challenging life

Third of Brits move home to improve lifestyle

Around a third of us have moved house in the last five years to seek a better quality of life.

That is according to research by Abbey, which says around 18.8 million of us were prepared to get a new mortgage to ensure we moved away from negative factors such as crime and unruly neighbours.

According to the research, almost 5.3 million people decided to move because crime levels in their previous area were too high.

In addition, 4.5 million people revealed that they moved to get away from irritating or annoying neighbours, while 2.6 million people wanted to live within a better school catchment area.

“When buying a home people have more to consider than just the building itself,” said Nici Audhlam Gardiner from Abbey.

“People spend a lot of time looking not only for what they want in a home, but for what they need in the area they live in, and more often than not, these requirements are for the greater good of the family.

“Crime and family safety is clearly a top priority for most buyers, but moving to get the right school for your children or to avoid unruly neighbours also have an important impact on the selection of a home,” she added.

The survey found that people in Wales are the most likely to move home in search of a better quality of life, with the majority of people moving to the south-west.

Tags: crime, school, Wales, home, life, quality of life

Prepared for a split?

It may be Valentine’s Day but nobody seems to have told the people at Alliance & Leicester.

The bank has today (February 14th) issued a warning to couples up and down the country, telling them not to get too carried away with their romantic feelings and take a bit of time to consider what could happen should they split up.

According to the bank, 87 per cent of couples are happy to make major joint purchases together, but just four per cent of these people have agreed what will happen to them following a split.

In addition to this, 50 per cent own a home together, while 56 per cent have joint debts. All of this, according to Alliance & Leicester, can lead to financial headaches and elongated heartache if the relationship begins to fizzle out.

“It is the tragic truth that the cost of splitting up can often last longer than the associated heartache,” said Richard Al-Dabbagh, senior personal loans manager at Alliance & Leicester, who admitted that discussing life without your current partner is “hardly romantic”.

“This research shows the huge amount of uncertainly that couples have as to who gets what,” continued Mr Al-Dabbagh.

“It seems that too many people are getting swept away in the moment and buying things jointly with no thought about what happens in the future. The financial implications of starting again after a split can be major.”

Alliance & Leicester says that the average cost of starting a new life following the end of a relationship is around £13,500.

Couples are advised to carefully consider their future finances and any difficulties that they may encounter should the worst happen.

Tags: life, moment, senior personal loans, truth, debts, major joint purchases, tragic truth, personal loans

Life insurance costs can rocket if you are overweight or a smoker

Although it has long since been known that life and health insurance companies charge higher premiums to consumers that are considered a higher risk, such as those that are very overweight or those that smoke, recent data has shown just what a dramatic difference smoking and excess weight can have when it comes to increases in insurance premiums, with many insurance companies charging over fifty percent more on policies to smokers and the very overweight than on policies to non-smokers and those not overweight.

The data suggests that insurance companies are really cracking down when it comes to what they consider are high risk customers, protecting themselves against increased risk of financial losses through charging a lot more on the cost of the premiums. These insurance companies look at high risk factors such as obesity and smoking when working out a policy, and those that come under the category of obese or smokers are seen to be a higher risk because they are more likely to make a claim according to insurance companies.

A life insurance manager at Sainsbury’s stated: “Health risks associated with smoking can have a big effect on life cover costs. It is vital for those that have kicked the habit to review their policies.” However, a number of pro-smoking organizations have raised concerns about the way that insurers automatically charge more to smokers than non-smokers, stating that the risk of a smoker under forty dying is no higher than that of a non-smoker.

A recent comparison study was carried out and this showed that on average smokers were charged around fifty six percent more on these insurance policies than non-smokers. The study was carried out through sending applications from two men of the same age to a number of the UK’s top insurance companies, and seeing what the price difference was based on one being a smoker and the other a non-smoker.

Tags: Insurance, health, life, accident, claim, emergency, premium, cover, cost

Is travel insurance more important than life cover?

Most Brits are well aware of the complications that can arise without the protection of life insurance cover. Nobody knows what lies around the corner, and an accident, sudden illness, or unexpected event could change everything in one fell swoop for our loved ones. Although nobody likes to dwell on the prospect of death it seems that many Brits are simply burying their heads in the sand when it comes to providing their loved ones with protection and peace of mind through life insurance cover, and a survey has revealed that an alarming percentage of Britons do not insure their lives.

A recent survey was carried out by Bright Grey, and a sample group of two thousand Brits was used in the survey in order to determine average figures relating to insurance cover. The results from the survey indicated that Britons considered life insurance cover to be the most important form of protective insurance, with thirty eight percent of those surveyed stating that they felt that it was most important to insure their lives. Home contents insurance and mortgage insurance cover were ranked next in line when it came to importance by the group surveyed.

However, despite the fact that the survey revealed the majority think that life insurance cover is the most important cover to have, it seems that Brits are more interested in protecting their travel than they are their lives. The most popular insurance cover, according to the report statistics, was home content cover, with seventy four percent of people having this type of protection. Hot on its heels was travel insurance cover, with sixty one percent taking out this type of policy.

According to the results of the survey life insurance cover came in third, with only fifty three percent enjoying the protection of this type of cover. Mortgage protection figures were also alarmingly low, with only twenty three percent having this type of cover. Bright Grey products director, Roger Edwards, stated: “This is a real worry. Less than a quarter of people protect their mortgage – over three times more people insure their home contents. And although people seem to know how important life insurance can be, many simply aren’t taking out cover.”

Tags: protection, policy, accident, Insurance, claim, premium