Credit card debts soaring amongst pensioners

It has been reported recently that credit card debt amongst pensioners has been soaring, with struggling pensioners sitting on £1.1 billion worth of credit card debt. Financial problems amongst many pensioners have increased as a result of soaring inflation coupled with minimal rates of interest being paid on their life savings.

Figures were released recently by Gfk NOP and showed that pensioners were no spending a fortune collectively on their credit cards each month, with pensioners’ credit card spending values rising by 20 percent since the start of this year. June saw pensioners spend an average of £354 each on their credit cards. The last time this level of spending was reached was at the height of the credit crunch in October 2008.

The total outstanding debt level for June amongst credit card pensioners was £1.1 billion, and this reflect an increase from £900 million from six months earlier. With many pensioners being hit with the rise in the cost of living coupled with the drop in savings interest rates many have had to turn to their credit cards to fund their essential spending, and this has seen the level of credit card debt rocket amongst older people. Many also have additional debts to deal with such as loans and finance, and a recent survey showed that one fifth of those aged fifty five and over still had a mortgage to pay off.

Joanna Parsley, a spokesperson for the consumer group Credit Action, said that older people were in a very vulnerable position, stating: ‘The growing indebtedness of older people is scary. We are talking about a generation who are particularly vulnerable as the income from their savings has been devastated.’

Tags: Credit Cards, finance, debt level, credit card debt, month, debt, Social Issues

Demand for cheque alternative from pensioner group

It was announced last year that the banking industry is looking to do away with the cheque, which has been a method of payment for millions of older people for many years before debit and credit cards came along. Many pensioners and older people still rely on cheques to make payments for various services and purchases, and the announcement that the cheque was to be phased out caused concern that many of these people would be left without a viable alternative.

The banking industry has said that it is planning to phase out cheques by around 2018, but many officials have said that this could impact on pensioners negatively, causing them stress and difficulties. A pensioner group is now calling for an effective and suitable paper alternative to cheques to be offered so that those that cannot use the Internet to make payments will still have a viable choice.

The group that is lobbying for the paper alternative to the cheque is the National Pensioners Convention, and its protest to find an alternative comes shortly after the BCC revealed that more than 75 percent of pensioners were against cheques being phased out. The NPC is now calling for a guaranteed paper alternative to be offered to older people in place of cheques.

An official from the NAC said: “If cheques are taken away from older people it will create an enormous stressful situation for them, because their bills are paid on time, with a cheque, in an envelope and put in the post. We have told the authorities that what is going to be required is a paper trail to replace the cheques.”

A spokesperson for the Wandsworth Older Peoples Forum added: “A lot of people who are housebound use cheques daily, and a lot of people who have no computer and therefore can’t get onto the internet or do internet banking would be lost without it.”

Tags: time, enormous stressful situation, pensioner, finance, concern, payment, cheque, Social Issues

Firms will have to stop forcing pensioners to retire

In his recent pre-election budget speech the Chancellor of the Exchequer, Alistair Darling, indicated that the Labour party was looking at scrapping the default retirement age, which would mean that firms would have to stop forcing pensioners to retire at the legal retirement age of sixty five.

At present firms can use their discretion with regards to retirement of workers that reach this age, but whilst they can allow them to continue working they can also refuse to allow them to continue to work should they wish to do so.

Under new reforms, should they go ahead, firms would have to allow workers to continue working if they want to. Alistair Darling indicated in his budget speech that the Labour party would either scrap the default retirement age or would increase the retirement age. He also indicated that the party was looking at giving older workers more rights with regards to being able to get more flexible working hours and conditions from their employers.

A number of campaign groups and charities have said that having the current retirement age in place is discrimination, as it means that older workers that feel perfectly capable of continuing to work could be forced to retire by employers simply because of their age, regardless of their abilities, health, and other factors. However, some believe that the plans will cause concern for some businesses who do not want to be stuck with older workers that refuse to retire.

In his budget speech Alistair Darling stated: ‘To enable people who want to work longer, we are consulting on reform of employers’ right to make people retire at 65. We are looking at options which include scrapping the default retirement age, raising it or giving employees stronger rights.’

Tags: chancellor of the exchequer, pensioners, Alistair Darling, retirement, Social Issues, place, speech alistair darling, Ed Miliband

Negative equity forces couples to live together

Charity officials have recently stated that there are many estranged couples that are being forced to live together under the same roof as a result of the property still being in negative equity, which means that they are unable to sell their home and move on as a result of the relationship ending. Read more

Tags: negative equity, partner, finance, charity, Social Issues, Homelessness, percent, Personal life

Charity wants more help for elderly in cold weather

A leading charity for the elderly is calling for more help with fuel bills for older people who are struggling to keep warm during the ongoing cold snap that is being experienced across Britain. Charity Age Concern and Help the Aged has stated that the government needs to increase the payments it makes to pensioners for fuel during the unusually long cold snap that is being seen across the country at the moment. Read more

Tags: Help the Aged, normal energy bill, spokesperson, Social Issues, nhs, United Kingdom

Switching Health Insurance Policies

Many UK residents are scratching their heads in disbelief as the renewals for their health insurance policies come due. The premiums have risen and in many cases by as much as 10%. Since having health insurance cover is vital, many people think they have no other choice but to pay the higher premiums. Such is not the case and there are ways of relieving this type of financial pain. Read more

Tags: age, health insurance, streamlined health insurance policy, health insurance costs, health insurance premiums, Social Issues, Labor, Bupa

Can you afford to give to charity?

Just a couple of years ago many of us were happy to give generously to a range of worth causes, and we were prepared to whip out our debit or credit cards whenever there was a charity appeal, sign up to monthly donations for charities, and make one off payments to worth causes. However, household finances have been hit hard over the past year, and households have had to cut down on their expenditure in order to keep their heads above water financially. Unfortunately, for many this has also meant having to cut back on the amount of money that they are able to donate to charity. Read more

Tags: advice, usage, Charities Commission, fuel, Social Issues, high rates

Retired couples amass savings

Retired couples in the UK have average savings and assets to the value of £269,479, according to a survey.

The average figure for single pensioners was found to be £134,739, Prudential reports.

Despite retired people having amassed such substantial savings, the organisation states that only 17 per cent of pensioners have sought financial guidance from a professional adviser.

Gary Shaughnessy, Prudential’s managing director of retail life and pensions, expresses surprise at the amount of savings and investments held by the average pensioner.

He adds: “The average pensioner could substantially boost their retirement income simply by using their savings and assets in different ways and exploring other options such as equity release to deliver an income.”

A separate study revealed last week by Zurich Financial Services suggests that one in five of the overall population believe it is too expensive to see a financial adviser.

In addition, it found that only three out of ten single people stated they had sought professional financial guidance.

Tags: financial adviser.In addition, ING Group, cent, single people, amount, adviser, Social Issues, Zurich Financial Services

Seek advice on insurance, urges Biba

Consumers have been urged to seek advice from an insurance broker before taking out a policy by the British Insurance Brokers’ Association (Biba).

Graeme Trudgill, technical and corporate affairs executive at Biba, has said that many insurance policies have become over-complicated and could be confusing for customers.

He advises people looking for insurance to consult a broker in order to avoid over-insuring and wasting money on “too many frills”.

Mr Trudgill commented: “The broker would be the best person to advise individual customers [on what cover they need] depending on individual circumstance.”

He added that over the past few years many insurers have made their policies more comprehensive and have tried to “include too many frills rather than sticking to the basics”.

Earlier this month, financial advice website Fool.co.uk reported that the average consumer takes out six different types of insurance on an annual basis costing £1,500 per year, yet is unaware of how much they are actually covered for.

Tags: British Insurance Brokers Association, financial advice, wasting money, GBP, homeinsurance, money

ABI: Don’t just go for the cheapest home insurance

With one in three households getting into arguments with their neighbours, people should not simply choose the cheapest home insurance policy as it may not cover the legal cots of a dispute, says the Association of British Insurers (ABI).

Kelly Ostler-Coyle, spokesperson for the ABI, advises people to consider what is covered in the insurance policy rather than simply choosing one based on cost.

Ms Ostler-Coyle, says that when shopping for insurance, people should ask themselves “Does it include legal cover? Does it have all risk extension fees so you’re covered for your items when you’re outside the home and how much [in terms of] belongings am I covered for?”

Yet people often take what they believe is a good deal without taking any advice and later find their claims rejected since the insurance policy they chose does not cover issues such as disputes, says an expert.

Over a million people say they have argued with their neighbours over noise, according to a new survey from Allianz Insurance.

Tags: Financial economics, Social Issues, Business and Economy, Allianz Insurance, advice

Identity theft victims older than fraudsters

Consumers who are victims of identity theft are older than the fraudsters they are conned by, shows new research.

Findings from CIFAS, the UK’s Fraud Prevention Service, revealed that males in their 40s are the most likely to become victims of identity fraud than any other age group.

Peter Hurst, chief executive with CIFAS, said: “While our research into fraudsters revealed that the typical fraudster seems to be getting younger, this displays a quite different picture.”

He added that the CIFAS research shows that that the more tech-savvy, younger, sections of society are more aware of the need to protect their data, and therefore take greater care.

Those in their 40s, who may be seen as more resource rich and burden light compared with younger spenders, are supposedly a particular niche group to exploit, said the service.

Instances of identity theft are thought to be on the rise with nearly 30 per cent of Brits falling victim to identity theft within the last 3 years, according to a poll of UK credit professionals, by the Credit Show.

Tags: rise, picture, younger spenders, shows new research, Social Issues, credit, Cifas, group

Using life insurance to pay inheritance tax is too expensive

Attempting to use life insurance to cover inheritance tax (IHT) bills is risky and expensive, according to financial experts.

Calculis said that the type of IHT the company offers is all about preserving an estate while, with life insurance, a premium is paid to take advantage of benefits.

Alex Pegley, director for Calculis, said: “If you can, through the use of trusts and specific types of investments actually reduce the inheritance tax bill, why use life insurance?

He added: “I don’t like life insurance for inheritance tax planning; it’s just pouring money down the drain.”

Mr Pegley also stated that the “nature of life insurance contracts” is that as one gets older and closer to needing to claim on them, the premiums go up.

Inheritance tax is paid on death at 40 per cent on all individual estates worth more than £300,000.

On 9 October 2007 the Chancellor of the Exchequer Alistair Darling raised the tax-free threshold to £600,000 for spouses and civil partners.

Tags: Social Issues, company, law, 9 october, Insurance, finance, IHT, Alex Pegley

Divorcing couples need a ‘clean, simple solution’

Couples going through a divorce should list their combined assets and agree on how to split them to ease problems and conflict, say leading financial advisers.

Lowland Financial said couples should look for the most straightforward way of splitting assets in order to “find a clean, simple solution”.

Graeme Mitchell, managing director of Lowland Financial, said: “An awful lot depends on how they [people] react – often what you find is when people first part, they say: ‘We’re going to try to deal with this amicably’. Then as time goes on they get more and more bitter and twisted.”

He said that couples should start by listing all their assets which were already in place, then those which were accumulated while they were together.

According to the most recent government statistics, the UK’s divorce rate was 12.2 divorces per 1,000 marriages in 2006 following two consecutive years of falls.

The divorce rate is now at its lowest level since 1984.

Tags: Christian, Social Issues, place, law, couples, Lowland, lot, United Kingdom

Parents should encourage children to save

Parents should highlight the costs of raising a family and encourage children to begin saving from an early age, claims an insurance company.

Liverpool Victoria (LV) said that pocket money – which on average currently amounts to £5,469 from the age of five to 18 – could turn into “quite a nice sum” if invested into a savings account as the child grows up.

Lucy Pope, media relations manager for Liverpool Victoria, said: “It’s really good for the child to actually see how things are growing, and obviously with the onset of technology children can be more savvy with online savings.”

“I think actually being able to see their money grow and things like that is a really nice way of bringing it all to life,” she concluded.

According to the most recent LV annual Cost of a Child survey, the average cost of raising a child up to the age of 21 is £186,000.

The most expensive costs are estimated as over £47,000 spent

Tags: cost of raising a child, Insurance, average cost of raising a child, child, savings account, nice sum

Greater equality for gay people over insurance

There has been a change in attitude when it comes to insuring homosexual people.

Chris Morgan, managing director of Compass Independent Financial Advisors, said that there has been a shift in the last five years.

In the past, he said, it would have been difficult to have assured a £200,000 sum for an “openly gay” customer, whereas now as much £1 million life assurance can be given.

However, he added: “There are other issues you have to consider in finance for example specialised advice for people with HIV and that’s around mortgages particularly because they can’t get life assurance.”

According to the ABI, in October 2005, a Statement of Best Practice was put in place by the insurance industry regarding HIV and insurance that affects the way some types of gay men are insured.

It states that ‘the gay question’ on life insurance forms, income protection and critical illness cover applications that many homosexuals consider unfair. The ABI have put an end to this and “other intrusive personal questions”.

Tags: Social Issues, illness cover applications, way, Managing director, change, homosexual people.Chris

Five-figure debts as young homebuyers load up credit cards

Young homebuyers are piling on debts onto their credit cards as they struggle to pay their mortgages, a debt charity said yesterday.

Figures from the Consumer Credit Counselling Service (CCCS) show that those who have bought homes under the age of 25 have over two-thirds more debt than their counterparts who rent, quite separate from mortgage payments.

The charity’s quarterly Debt Dashboard study, which surveyed 73,000 of the CCCS’ client records, shows that people who use their helplines who rent owe on average £12,113.

This figure soars to £20,290 among homebuyers.

CCCS chairman Malcolm Hurlston said: “There is a danger in young people getting on the housing ladder before they are ready financially.

“Before taking out a mortgage the under 25s should make sure they can still afford to live and not rely on credit to plug the gaps.”

The charity also revealed that unsecured personal loans accounted for more than half of the total debt recorded by young people who have come to them for help.

Tags: half, helplines, young homebuyers load, client, help, soars

Car insurance increases

Car insurance premiums are higher than ever before, according to the AA’s British Insurance Premium Index.

However, home and contents insurance premiums have fallen in the past quarter.

AA says that the average car insurance premium is now £822, a rise of 2.5 per cent in the last three months.

The firm points out that this is more than double the amount quoted in the first ever index back in July 1994.

Despite this, home and contents insurance premiums have fallen slightly in the same period of time.

Buildings cover is down almost two per cent, with the average quote being £207, while contents insurance has fallen by a little over one per cent to £147.

“Home insurance represents particularly good value having changed little over the past decade and while the trend of car insurance is firmly upward, there are still deals to be had,” said Kevin Sinclair, managing director of AA Insurance.

“Things have never been better for customers in terms of choice but make sure you’re comparing like for like and not just price for price.”

Tags: amount, rise, Financial services, Social Issues, insurance premiums, car insurance premiums

Over 55s not ready for retirement

Millions of Britons aged 55 or over have not even begun to think about life after retirement.

That is according to new research by Abbey which found that around two million people in this age group have given it no thought at all.

In addition, 4.5 million people have not made plans for what they will do once they stop working.

This statistic is worrying many observers who say that many people are going to head into retirement and face a financial crisis due to their wayward banking.

The next generation is not looking much better either, with 1.8 million people between the ages of 45 and 54 not having considered retirement.

“This research shows the potential retirement time bomb that the 50 plus generation are facing,” warned Reza Attar-Zadeh, head of savings at Abbey.

According to Abbey’s study, one million people over the age of 55 feel that they will have to work through their retirement as they have little money put aside.

Added to this, 1.5 million in the same generation say that their home is their only form of financial insurance to see them through their twilight years.

Tags: Generations and Age Groups, head, group, retirement, crisis, Financial services, one million, Social Issues

Are you smoking away your money?

Smokers are being urged to kick the habit as National No Smoking Day lights up the UK on March 14th.

Co-Operative Insurance is calling upon all smokers to give up so that they can improve their health and their financial standing.

The firm claims that a smoker who gets through 20 cigarettes a day could save themselves over £1,800 every year.

That figure doubles if a couple quit smoking together but the financial benefits do not stop there.

It is also possible to severely reduce the premiums on life insurance cover by stopping, as well as premiums on income protection and critical illness insurance.

“Giving up smoking can save people a significant amount as well as hopefully bringing a longer and better quality of life,” commented Fiona Jackson, head of protection at Co-Operative Insurance.

“Someone who is able to give up an addictive habit like smoking can certainly take charge of their own financial destiny and make adequate financial provisions for their future.”

Research shows that smoking is more common among men than women, although the gap is just three per cent.

Smoking is said to cause 30 per cent of all cancer deaths, 17 per cent of heart disease deaths and at least 80 per cent of deaths from bronchitis and emphysema.

Tags: financial benefits, March, heart disease, year.That figure, someone, United Kingdom, Social Issues, financial standing.The firm

Motor Insurance – What Is A No Claims Bonus?

It’s a term you hear bounded about often in the world of motor insurance, but it is also one of the least understood: the ‘no claims bonus‘. So, what is a ‘no claims bonus’ and how can it help me?

The basics

As you can probably work out, a no claims bonus is ‘gift’ given to a policyholder if they do not claim on their insurance during the period of the insurance. In effect what this means is that if you reinsure your motor car with the same car insurance provider, you’ll be given a good conduct discount on what would otherwise have been a full premium insurance policy.

The misconception

There are two fundamental flaws with the no claims bonus: one, the understanding that you are going to reinsure with the same car insurance provider. In effect, what the insurance provider is saying to you is “don’t look elsewhere for your car insurance, because we are giving you a discount for being a good driver”. Fine; however, this works on the assumption that you cannot find cheaper motor insurance elsewhere – such as on the internet. Unfortunately, this assumption can often be wrong, and in most cases motorists are reluctant to change motor car insurance provider because they have fallen into the trap of believing they cannot get a better deal elsewhere.

Second, there is a fundamental understanding that your renewal policy with a no claims bonus will be cheaper than your previous policy. Actually, considering you have made no claim on your insurance, not an unreasonable concept to arrive at. However, not always the case – although you may be given a no claims bonus, the premium is set by the amount of claims that were made, which you have no say in as you didn’t make a claim! So, it is very possible to have a good conduct no claims bonus and still be paying higher premiums in year two than you were in year one!

The 5-year limitation

Naturally with every year that you didn’t make a claim against your motor insurance provider you would expect to get an additional no claims bonus. In reality this is not the case. Most motor insurance policy providers limit the period of no claims bonuses to 5 years of no claims. Thereafter, not making a claim is not helping to reduce your insurance premium.

As such, although you can surely make substantial savings with a no claims bonus, don’t let this lull you into thinking you cannot find motor insurance cheaper elsewhere and check out some of the online car insurance quotes to find out if you can get a cheaper car insurance quote than you are currently getting – even with your no claims bonus. You never know, you might actually be pleasantly surprised.

Tags: Social Issues, claims bonus, claim, motor insurance policy, no claims bonus

How to Save Money on Home Insurance

As a homeowner, if you are proactive in your shopping around, you can save on your yearly premium. There is no rule that states as a homeowner that you must wait till the end of your policy year to renew! By shopping around, if a cheaper price is found for the same (if not better) policy coverage, there is always an option to switch insurance companies as long as a claim hasn’t been made. Read more

Tags: Social Issues, mortgage, best quote, home insurance, claim, buildings insurance, home insurance savings

Advice On Choosing Car Insurance

Price? Well there are many more important features to remember when choosing your next policy. Here are a few of the main points. Read more

Tags: choosing car insurance, Types of insurance, quotes, Admiral Group, Social Issues

What is Insurance?

It’s only just begun

Let’s say you are a young person with very little money and no job. You’re driving down the road in your new car that is anything but “new” because you just picked it up from a bloke who sold it to you for three hundred quid. The engine’s rattling like a bag full of spanners and the smell of petrol inside the car is causing you a little concern. But that doesn’t matter, because you have a car, your first car. Read more

Tags: Political risk insurance, Insurance, Unemployment insurance, small sums, Social Issues, funeral expenses