Chartered financial planner for Informed Choice, Martin Bamford, feels that the low interest rate and high levels of inflation may be what is discouraging some consumers from saving. However, if savers are unwilling to save, they should take the opportunity to pay off debts on their mortgages and credit cards.

Individuals should be trying to improve their financial predicament overall, he said. “Paying off debts while the best interest rates are not available on savings “usually makes good financial sense”, Mr Bamford stated.

The Consumer Price Index annual figure for inflation was up to 3.5 per cent in January, from 2.9 per cent in December.

According to Mr Bamford, this high level “is a bit of a cruel trick for the UK economy to play on savers, after interest rates have been at such a low level”.

©2012 MoneyBlog. All Rights Reserved.

A new study has indicated that money worries are leading some UK consumers to neglect their love lives.
According to research conducted by Scottish Widows, one in eight people are too busy worrying about their finances to enjoy quality time with their loved ones.

The study revealed that a lack of time and work commitments are also having a negative impact upon many couples’ relationships.

Alison Morris, savings expert for Scottish Widows, said better financial planning can help take the strain off many professionals and enable them to enjoy a better work/life balance.

“By looking ahead and planning their finances now, people can spend more time focusing on the important things in life such as their loved ones,” she commented.

“And for those that are able to put money aside for their retirement, Scottish Widows recommends saving 12 per cent of your income.”

Last week, a study conducted by Birmingham Midshires indicated that British consumers saved more in the three months to January 2010 than a year previously.

On average, savers put away £776 in the fourth quarter of 2009, compared to £329 in the same period 12 months ago.

©2012 MoneyBlog. All Rights Reserved.

It’s more important than ever to know your credit score, but why is this the case and how do you find out what information is held about you on your credit file?

Lenders are making life difficult for those who wish to obtain credit and even those who think they have a perfect history are finding themselves being turned away for products they would have been a shoe-in for a couple of years ago.
It’s therefore well worth obtaining a copy of your credit file before you apply for a mortgage, loan or credit card and you can apply for yours through moneysupermarket.com’s new credit checking channel.

But what should you look for when you’ve got your credit file? What exactly is a good credit history? And what do providers look out for when deciding whether or not you are worthy of their credit?

Read on to find out.

What do lenders look for?
Mortgage, loan and credit card providers have a ’score’ card which they use to evaluate credit applications. They give or take away points from you depending on the information that is on your credit file. Each lender’s score card is different although the main factors they look out for, and will reward you points on, is your current credit conduct, whether or not you appear on the Electoral Roll and how long you have been in continuous employment.

What information is held about you?
When you receive your credit file, the following information will appear on it:

Electoral Roll information – the date your name was entered onto the electoral register at your current address shows here, it will also show the dates that you were on the Electoral Roll at previous addresses. Lenders will use this information as proof that you live where you say you live.

Financial associates and aliases – you will find here any names that you have previously been known as and also anyone that you are tied to financially. For example, if you hold a joint bank account with a partner, then this information will appear as well as basic details of the other person’s whose name the account is in.

Public record information – here you will find details of any County Court Judgements (CCJs), Involuntary Arrangements (IVAs) and bankruptcies. It will show the date that the information was registered and, if applicable, when the arrangement or CCJ was satisfied, in the case of a bankruptcy, it will show when this was discharged.

©2012 MoneyBlog. All Rights Reserved.

According to the Association of Business Recovery Professionals, up to one million people in the UK are having a difficult time sorting out their debt problems.
Their research shows that there are 916,000 people struggling with their financial problems without seeking help, so their claim is that the government’s latest insolvency figures only show part of the story.
On top of this number, there are also 574,000 individuals who have contacted creditors to get assistance in meeting their debt repayments.

President of the Association of Business Recovery Professionals, Peter Sargent said: “We know from previous recessions that early recovery can be a dangerous time – insolvencies continue to rise even after a recession ends.”
He has previously suggested that one way of preventing vulnerable people from getting into debt is by banning point of sale store cards in high street shops, describing it as being “irresponsible” for financially unqualified shop assistants to be able to hand over credit.

©2012 MoneyBlog. All Rights Reserved.

Many of our readers know exactly what it’s like to let money problems get the better of you, and the amount of pressure and stress that debt can cause has become a real problem in modern society, especially since the recession started and credit dried up. With more and more people struggling to keep their heads above the water financially and many more even facing such drastic measures as repossession of their homes if they can’t keep up with payment, it’s not too surprising that the NHS have launched a new helpline to help with all the worry money can cause.

The Stress Line has opened at the time of year when people most begin to worry about their debt – just after the Christmas rush where many people rely on credit to buy gifts. Unlike a typical debt help line, the NHS Stress Line will not only guide people towards the proper financial help but also aims to give people information and advice on the mental health problems and stress that can be directly associated with monetary worries.

The number for the Stress Line is 0300 123 2000 and the line is open every day between 8 am and 10 pm. You can also call if you are worried about housing or unemployment – issues often closely linked with debt. The Stress Line claimed that over half of the UK population were worried about their finances in 2009.

“Money worries and fears about job security have the potential to trigger mental health problems like depression and anxiety.” Said Paul Farmer, head of the mental health charity, Mind.

“When people are faced with piles of bills and deep emotional despair the future can seem bleak and it can be difficult to know where to turn for advice. We would encourage anyone experiencing these difficulties to contact the NHS Stress Line for support and advice”

©2012 MoneyBlog. All Rights Reserved.

How has the year been for you? It?s certainly been a strange one in terms of finance, we?ve seen experts telling us we?re going to rise out of the recession and then telling us that we probably aren?t, we?ve had a lower VAT rate for the whole year for the first time in a long while and we?ve been told that the banks actually are allowed to charge whatever they like in terms of overdrafts, so if nothing else it?s been an interesting 12 months.

However, one in twenty people have described this year as being the worst year ever, and half said they were worried about debt and money problems. Others also said the last year has been generally bad for them, and the Samaritans have asked people to try to not let their financial problems get the better of them.

The rather depressing poll of around 2,000 people found that after money problems, relationships with family and friends was the next biggest worry, while health concerns, job security and workplace stress round off the top 5 biggest worries of the UK.

Chief Executive of the Samaritans, Catherine Johnstone said: ?In the last year, we received five million calls and many of them were about the worries identified in this survey, with approximately one in every ten calls linked to financial stress.?

“Sharing your troubles can be a huge relief and is often the first step to finding a way of coping with the challenges that life throws at all of us.”

Looking back, has 2009 been a good or bad year for you, financially or otherwise? According to the poll only 18% of respondents said that 2009 was actually a good year!

©2012 MoneyBlog. All Rights Reserved.

According to Engage Mutual Assurance, more than one in five parents borrow money from their children’s savings to pay household bills.

About 44 per cent of parents are borrowing between £200 and £500 from their children’s savings to pay unexpected bills. A total of 40 per cent of parents say they use the money to pay for household bills such as gas and electricity.

The average electricity bill for a semi detached house in the UK is £825 and the average gas bill is £762, according to whatprice.co.uk. Ofgem, the energy watchdog, has suggested households could save over £100 per year by switching suppliers.

Marketing director at Engage Mutual, Karl Elliott, said, “Almost six in ten adults admit their financial situation has significantly worsened over the past 18 months. And whilst it might be possible to budget for everyday spending and the usual bills and direct debits, it is the unexpected costs which people find hard to cope with.”

The Co-operative Bank did a survey which revealed that UK homeowners are investing more money in energy efficient technology in a bid to reduce carbon emissions and cut their gas and electricity bills.

©2012 MoneyBlog. All Rights Reserved.

According to new research the amount we put away in our savings hasn’t changed much in the last few years, despite the recession and the lower interest rates that you might think would stop people from putting so much away every month.

People were putting away around 6% of their yearly income in 2005 and are still putting away around the same amount in 2009, according to National Savings and Investments.

Despite little happening in terms of the amount, the NSI believe that the actual reason for people to save has shifted. Previously people tended to save up for holidays or other special occasions whereas now savings are used more as a ?safety net? or an emergency sum of money.

The figures also show that people are paying off their debts more than ever.

Borrowing on cards has risen by over ?100 million in the last month but that?s balanced out by a huge ?731m fall in consumer credit ? the biggest ever recorded. Less people are getting credit in the form of things like bank loans, car loans, and hire purchase agreements from catalogues or HP stores. Adrian Lowcock of BestInvest said:

“Considering interest rates on savings accounts are at such low levels, investors are using their money to greater effect, paying off mortgages and investing in assets that produce a higher yield than cash. Debt levels have come down and many investors have taken advantage of the new Isa allowances introduced in October.”

Obviously the fact that people are continuing to save and get themselves out of debt is great news. However, it will be some time before interest rates rise and savers really see any advantage in their continued saving habits.

©2012 MoneyBlog. All Rights Reserved.

As a nation, we owe more than £53.9 billion in credit card debt, and the government is launching a whole set of new proposals aimed at drastically reducing that figure including increasing minimum monthly payments and banning automatic limit increases on cards – both typical credit cards and store cards alike.

Although the proposals are still very much in the planning stages and we might not see any action until as late as the first quarter of 2011, here are some of the main proposals and what they mean.

1. 1. Automatic Credit Limit Increases

This could lead to the banning of automatic credit limits, which the government believe are major causes of people getting themselves into more debt. Softer ideas include putting out better information about automatic rises and limiting the size of the rises as they are given.

1. 2. Increase Minimum Payments

Curbing the debt cycle will require many more people to pay off their cards much faster than they currently do by using the minimum monthly payments. Often this reaches between 2% and 3% and only barely covers the interest on the card meaning you could potentially be paying off the card forever.

Again, the more lenient options include more information while the tougher one wants to create a limit on how small a minimum repayment can get. Increasing minimums will get people out of debt faster although simply blanketing the payments could lead to a lot of people defaulting on their cards because they can’t afford to pay the new rates.

It’s also likely to be a bad idea for anyone with more than one credit card as higher minimums will make it harder to pay off higher priority debts first.

1. 3. Anti Ratejacking Measures

Ratejacking occurs when credit card companies push up the interest rate on your debt without warning or justification. This has already been discussed by the government previously, and new laws mean that credit companies have to be more transparent. However, the new tougher approach is talking about banning the practice entirely so a interest rate remains fixed.

1. 4. Applying Payments

Most card companies apply payments to the cheaper debt first, meaning expensive debt is trapped and incurring larger and larger sums of interest.

This could be changed so that payments will be applied to the most expensive debt first my default – the system that Nationwide already uses – and could make a significant difference to those in debt.

©2012 MoneyBlog. All Rights Reserved.

The UK Insolvency helpline will be receiving a grant that will allow it to expand its services during the recession. The helpline is the biggest debt charity in the United Kingdom and has found itself in the spotlight in the last few years, as the recession has caused many individuals and businesses to become insolvent and look for ways out of their spiralling debt.

The helpline will be expanding its operation from early next year to help more people who call up asking for advice. The team specialise in a relative new form of debt relief called an Individual Voluntary Agreement (IVA) which can be a fresh start for people facing debts of over £15,000 and no easy way to pay back the money.

The IVA has come under fire in recent years for being seen as a ‘get out clause’ for people who have been reckless with money, and a softer alternative to full bankruptcy. However, an IVA is still a major part of beginning to rebuild the finances of many Britons, and the helpline is able to provide individually tailored and independent advice.

The government is concerned about the large amount of companies mis-selling the IVA scheme and even charging large fees on top of existing debt to advise and arrange the specifics of setting up an IVA.

Head of the IVA assessment team, Akim Shazah said: “Support from independent IVA advisors and early intervention is really important. I am delighted that our IVA team has got this extra funding and welcome this new expanded IVA helpline service and am reassured that people who find themselves in difficulty can ring someone up to discuss their issues through”

In related news, the helpline has recently reported a 30% rise in calls to its specialised helpline for corporate insolvency, signalling a large increase in company debt which can often be linked to or influenced by personal debt.

©2012 MoneyBlog. All Rights Reserved.