‘Danger thresholds’ show borrowers most at risk

An industry expert has highlighted the fact that many people falling outside “defined thresholds” could be adversely affected by credit crunch.

Fool.co.uk urges mortgage borrowers to recognise the risks they could face from the wider impact of global credit problems by taking guidance from the Bank of England’s Financial Stability report.

It states that those with repayments of over 55 per cent of their total household income are most at risk, standing outside the defined thresholds.

David Kuo, head of personal finance at Fool.co.uk, advised: “Consumers should draw up a Statement of Affairs immediately to get a useful snapshot of their finances. The snapshot will tell, at a glance, whether you fall into one of the ‘at risk’ categories.

“Failing to draw up a Statement of Affairs in the current difficult financial climate is tantamount to driving a car without shock absorbers.”

The Financial Stability report speaks of a “tightening” in the money markets, pointing to the need for more focus on liquidity management and better stress testing among other things.

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Speeding youngsters

Many youngsters in Britain have risked their lives by getting into a car with a speeding driver.

Research by Co-operative Insurance (CIS) and road charity Brake has found that as many as two thirds of people aged between 15 and 25 have been a passenger in a speeding vehicle.

Of these, more than half admitted that they did not ask the driver to slow down despite being aware of the associated risks.

In total, 4,500 youngsters were asked to complete the survey and it was revealed that 65 per cent had been in a car which was driven at 40mph in a 30mph zone or at 70mph on a rural road.

The findings have led to increased calls for changes to be made to the way in which people are taught to drive.

“Now is the time for the government to take action and tackle the problem of risk-taking young drivers,” demanded Jools Townsend from Brake.

“Too many people have died due to a deadly combination of inexperience and recklessness among many young drivers. More will die if positive steps are not taken immediately to educate young people and reform the learning to drive process.

“The government has a duty to society to ensure every young person gets an education in road safety and introduce a more structured system of training and testing novices,” she added.

Young drivers are often forced to pay higher car insurance premiums than other road users as statistics show that they more likely to be involved in an accident.

Tags: road charity brake, time, safety, Road traffic safety, testing, road users, zone, half