Energy prices in UK have risen twice as fast as EU

According to a recently released report the cost of energy usage in the UK has increased twice as fast as in the EU. The figures were released by the Organisation for Economic Co-operation and Development. Read more

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Mind: Debt can exacerbate mental health problems

Consumers who suffer from mental health problems can find their health deteriorates when they get into debt and receive letters from financial institutions, the national association for mental health, Mind, has said.

A spokesperson for the organisation said that people in debt are not just receiving one letter a week, but a barrage of phone calls throughout the day from different people, which can feel “quite intense” for some people.

Recent research by Mind found that the biggest reasons for people getting into problem debt were mental health problems (66 per cent), living on a low income (66 per cent) and difficulties in managing money (58 per cent).

Mind said that it has been working with the Financial Services Authority to change the way in which lenders treat their customers who have mental health problems and fall into debt.

“We are calling on banks to keep to… a code of practice, about responding appropriately to things like missed payments and treating people who are worried and have anxiety and depression appropriately,” added the spokesperson.

Tags: anxiety, Bipolar disorder, organisation, cent, financial, Financial Services Authority, Alternative medicine

Savers ‘more cautious’

It is not only the credit crunch that is having an impact on consumer confidence, the Newcastle Building Society has said.

A number of factors, including the financial crisis affecting Northern Rock last summer, as well as uncertain stock market performance prior to that, have led to people being more cautious with their savings, according to the company’s senior marketing executive.

Steve Urwin said that these events have led to consumers moving away from investing in high-risk products.

According to research by the building society, savers are more cautious today than they were a year ago, with one in ten preferring to stash their cash under the mattress rather than put it in a savings account.

Building societies often deal with more “naturally cautious” customers, according to Mr Urwin, and the organisation has recently seen greater interest in its fixed rate bonds and Guaranteed Equity Bonds.

“Fixed rate bonds offer a guarantee of rate for a fixed period and GEBs offer stock market linked growth but with absolute capital guarantees,” explained Mr Urwin.

Tags: executive, organisation, cautious, financial crisis, stock market, credit, Newcastle Building Society

NAPF: Pensions still seen as most important benefit

Workplace pension schemes are considered the most important benefit an employer can offer and it is expected that their up-take will increase in the future, the National Association of Pension Funds (NAPF) has said.

The Personal Accounts system is expected to be launched in 2012 and the changes in workplace pensions that it will bring about are expected to make them even more popular, according to the organisation.

Mark Brooks, a spokesperson for the NAPF, said: “There is a growing realisation that to enjoy a good standard of living on retirement, there is a need to have an additional pension…it is no surprise [workplace pensions] are still seen as the most important benefit.”

He said that tax advantages and employer contributions are two factors that make work pensions attractive to employees.

A recent survey by NAPF found that almost 49 per cent of respondents said they would feel greater loyalty to their company if a workplace pension was offered.

Tags: Pension, Association, employment, organisation, important benefit."He, respondents

BRC: Credit crunch leading to “cash comeback”

More people are using cash to pay for their purchases amid growing consumer concerns about how much money they are spending, the British Retail Consortium (BRC) has claimed.

The global credit crunch is causing consumers to be more cautious with their money, says BRC spokesperson Richard Dodd.

New figures from the organisation show that cash is now used for 60 per cent of all transactions, an increase of 54 per cent from 2007.

Cash now represents 34 per cent of all money spent in the retail sector, compared with 32 per cent a year ago.

Recent research from uSwitch shows that on average, credit card holders owe £1,812.

With ten per cent of all cardholders paying the minimum on their cards, the company estimates 3.5 million people will spend close to the next 30 years clearing their credit cards.

“People’s enthusiasm for using cards is slipping. That’s because people are not only reluctant to borrow, they are also reluctant to use cards,” concluded Mr Dodd.

Tags: Richard Dodd, Business Finance, organisation, spokesperson richard dodd.new, company, crunch

People advised not to rely on loans for Christmas

Consumers are advised not to take out elf”>loans in order to “make Christmas happen”, an industry expert has said.

According to Steven Baillie, head of loans at Sainsbury’s Bank, using a personal loan purely to fund Christmas is not recommendable, as it may take a few years to pay off.

“If you’ve got to carry that forward for another 12, 24, 36 months … Christmas comes round two or three times before you’ve paid off the first one. So it’s not something I would, as a responsible lending organisation, expect customers to do,” he said.

Research by MoneyExpert.com on Christmas spending reveals that over a million bills were neglected in January this year as a result of excessive spending over the festive season.

Meanwhile, Credit Action found that there were 669 million credit card transactions made in December 2006, up six per cent on the previous year and equating to 250 transactions per second throughout the month.

Tags: responsible lending organisation, head of loans, Sainsbury, round, com, previous year, organisation, result

Mortgage holders told credit cards ‘not necessarily a bad thing’

People with mortgages who use credit cards to make sure they meet repayments are not necessarily doing the wrong thing.

According to the director of Debt Advice Bureau, Stephen Rose, some people have more or less paid for a house with the help of a credit card and “they’ve done very well”.

“If somebody is paying considerably less on their credit card than they are on their mortgage then it’s a good thing, but if they are paying more on their credit card than they are on their mortgage then it’s a bad thing,” he said.

A recent survey published by Shelter magazine ROOF showed that over a million people have used a credit card to pay off their mortgage or rent in the last year. This figure represents six percent of the population repaying mortgage loans or rent.

The Debt Advice Bureau is a not-for-profit organisation that gives information to residents in the UK concerning their debt issues.

The bureau sees around 4,000 people every month, giving them impartial advice on their problems relating to debt.

Tags: shelter, director, population, somebody, debt issues, organisation, debt advice, Stoozing

Insurance sells process must improve

Firms which sell general insurance have been told that they must improve their standards when cold calling potential customers.

The Financial Services Authority (FSA) is concerned that customers are not being treated fairly and the organisation is demanding that standards improve.

Research by the FSA, which looked at the sales processes of 43 firms, found that the standard of sales were poor when the company contacted the customer.

“The quality of cold calling in general insurance sales was disappointing – consumers were pressurised and the benefits of the product were sometimes exaggerated,” said Vernon Everitt, director of retail themes at the FSA.

“We expect to see significant improvements when consumers are cold called. Swift action has been taken to deliver those improvements at the firms we visited and we are following up with other firms which use cold calling as part of their sales strategy.

“The bottom line is that firms must never pressurise consumers into making a rushed decision and must always clearly spell out the nature and limitations of the products,” he added.

The FSA advises consumers to make sure that they do not make a rushed decision and keep a cool head when being sold a product which they did not enquire about.

The same piece of research from the FSA found that the standard of sales was high when a customer initiated the phone call.

Tags: general insurance sales, swift action, Cold calling, strategy, insurance sales, Economy of the United Kingdom, organisation, head

Potential PPI refund

Consumers could save themselves large sums of money by seeking a better deal on their payment protection insurance (PPI) for a personal loan.

That is according to the Post Office, which says some borrowers may find that they could save thousands of pounds.

The firm points out that PPI that is sold alongside a loan is normally added to the total sum of the amount borrowed, meaning the consumer will pay interest on the insurance.

Customers are now being urged to challenge their lender and could find that they receive a refund for the interest charged.

“The refund could be substantial, so people shouldn’t miss out,” said Claire Oldstein, head of communications at the Post Office.

“Banks and loan providers are in an ideal position to sell insurance with their loans, but customers should challenge them to find out what the true cost of their payment protection is.

“By comparing this to standalone policies, customers can see for themselves that better value deals are available,” she added.

The Post Office has recently called for an open PPI market in response to an investigation by the Office of Fair Trading.

The organisation wants it to be mandatory that consumers are told by lenders that they can get better or cheaper policies by shopping around.

Tags: total sum, organisation, payment, consumer, Financial Services Authority