Older people likely to cut back on spending before younger consumers

It has been claimed that older people in the UK are more likely to curb their spending on things such as credit cards and current accounts than younger consumers. With many people struggling financially, and with rising living costs, increasing VAT levels, and rising unemployment levels likely to further affect spending power amongst consumers, cutting back has become a necessity for many people.

An official from Lovemoney.com claims that it is the older members of society that are likely to react to economic changes before younger ones, and older people are more likely to reduce their spending on credit cards and via their current accounts. Older people are also more likely to start putting money aside in savings than younger people.

Ed Bowsher, the official from Lovemoney.com, said that with interest rates still at a record low younger people are more likely to continue spending in the short to medium term and less likely to think about reining their spending in or trying to save any money. However, he said that older people would not have that ‘feel good’ factor.

Bowsher’s prediction comes after the publication of a recent report, which showed that since the start of the recession around 75 percent of consumers in Britain had altered their spending habits, with many having to make huge changes to their spending levels because of the financial strains that have come about from the recession and the global financial crisis.

However, many people have turned to credit cards and overdrafts in order to keep up with their financial commitment or continue with a particular lifestyle, and this has led to rising debt levels amongst households in the UK.

Tags: overdrafts, United Kingdom, consumer, power, particular lifestyle, factor, necessity, debt levels

Banks make huge profits from overdraft fees

A recent report has suggested that banks are making huge profits from the controversial overdraft fees, which have been in the financial headlines lately having been at the centre of a high court test case with regards to their fairness, with some banks charging close to £40 per fee even though the cost to the bank is often just a few pounds. Read more

Tags: interest, court test, overdrafts, conclusion, Insurance, cut, overdraft limits, centre

Brits missing out on ‘current account revolution’

The majority of people fail to switch their current account, despite being able to take advantage of better offers.

Research, carried out by Abbey, shows that 60 per cent of Britons have held the same current account for at least ten years, with 18 per cent having never switched.

The bank says this is despite seeing interest rates with some banks soar and is the result of misinformation on the customers’ part.

Abbey looked into the reasons behind the lack of movement and came back with some surprising results.

Of those asked, 65 per cent said that switching account is too much hassle, although research shows that 90 per cent of switchers found it either ‘very easy’ or ‘fairly easy’.

Almost half (49 per cent) said that they thought all current accounts are similar, this is despite the fact that the difference between the best and worst credit interest rates is 5.9 per cent.

Abbey also found that 16 per cent of people think that it is impossible to move your overdraft to a new account. In fact, overdrafts of £5,000 or less can be matched, with some banks offering an interest-free period.

“Myths and misinformation are stopping people from joining the current account revolution,” said Steve Shore, head of banking at Abbey.

“The difference between the best and worst rates is significant, and customers can greatly benefit from switching to a better rate.”

Tags: overdraft, hassle, current account revolution, overdrafts, investment, new account, bank

UK lending figures rise

Lending to individuals in the UK rose again in November, according to the Bank of England.

Figures show that there was an increase in all types of loans of £10.9 billion between October and November.

Credit cards, personal loans and overdrafts increased by £0.2 billion, while mortgages saw the biggest increases.

In total, November saw a £9.8 billion increase in mortgage lending compared to October, signalling a rise of 0.9 per cent.

“This is a very strong set of mortgage data. Mortgage approvals amounted to a near three-year high of 129,000 in November, while lending secured on dwellings amounted to a three-year high of £9.8 billion,” said Howard Archer of financial consultancy Global Insight.

Mr Archer said that unsecured borrowing “eased back” between October and November as consumers become more concerned abut their future financial situation.

“Elevated debt levels, higher interest rates, rising unemployment and increasing pension concerns mean that there is an increased need for many consumers to try and improve their finances,” he added.

He said that more and more people are switching to secured borrowing to finance their spending.

Tags: overdrafts, abut, november, mortgage, need