One Advice | Bankruptcy, IVA & Debt News

It is estimated that a total of £165m worth of loans were taken out in the past year to pay for school fees. Research from Sainsbury’s Finance revealed that the average loan amount taken out by its customers for private school fees was £9,065.

They estimate that 18,000 loans were taken out last year for this reason alone. Steven Baillie, head of loans at the group said: “A combination of a rise in the cost of living, more children going to private school and the cost of private education rising could lead to more parents taking out loans to help fund their children’s education.”

This prediction could mean that more loans are taken out to fund a child’s education, as government data reveals that the total UK household expenditure on education fees standing at £8.89 billion in 2006 which is an increase of 32%, compared to the same figures in 2003-2005.

New research reveals that one in ten are in the dark about their debt levels. CreditExpert report that although 96% claim to be familiar with their finances, this statement could not be further from the truth as:

• 36% do not fully understand what APR means.
• 26% do not know how much they have left to pay on their loans.
• 20% only plan their finances a maximum of twice a year.
• 10% do not know how much debt they are in.

As well as being aware about your outgoings, it is important that you understand what APR you are being charged on your debt. Although most of those surveyed were familiar with their overdraft limit, almost half were unaware what their APR was on their credit cards.

Managing director of CreditExpert, Jim Hodgkins recommends that you keep on top of your finances and plan for the future. Simple tasks include checking your credit card statements so that you are aware of your spending. He adds that it is “alarming to see that while almost the entire UK population think they are on top of their finances, many aren’t.”

Customers are continually being ripped off by their store cards, despite of new rules which were introduced to protect the 11 million shoppers who use them from getting further into unnecessary debt.

Last year the Competition Commission ordered that stores offering cards with interest rates of 25% or more, must tell customers that there may be better deals and include this warning on each monthly statement. Their findings reports that store cardholders were being ripped-off by at least £55 million a year, due to extortionate interest rates, insurance premiums and other charges.

However, store cards seem to be getting away with hiking charges as much as 7%, as they do not have to warn their customers as long as the interest rate remains under 25%.

Ed Bowsher of money website fool.co.uk, says “Store cards are the devil in disguise. They initially offer attractive benefits and bonuses which can be hard to resist but there is a downside to grabbing these discounts and deals.”

New research by the New Local Government Network (NLGN) urges councils to take a more proactive approach in helping homeowners who are struggling with debt, meaning that they are facing repossession or eviction from their own homes.

The report shows that councils could help by offering whole or partial mortgages at below the market rate. The NLGN believe that this would help to keep people in their homes so that they can hopefully avoid unnecessary pressure on social housing, which is where many evicted families end up. This action needs to happen sooner rather than later as mortgage lenders expect approximately 45,000 homes to be repossessed in 2008, a yearly increase of more than 20,000.

Anthony Brand, the reports author, said that the “Government should set £2 billion of its £50 billion intervention package aside for supporting these measures, and allowing the hardest hit councils to apply for funding. This could help up to 15,000 people out of difficulty and even provide a long-term profit to the Treasury.”

Credit crunch fears may be causing people to shop for cheap bargains and tighten up their purse strings, but it seems as though the credit crunch is not hurting the cosmetic surgery industry!

New reports from The Harley Medical Group shows that the number of surgery procedures has risen by a third in the last year alone, thus showing that dealing with debt is no worry when it comes to a selvete beach body as tummy tucks have risen by 59%!

Following the tummy tuck, the procedures that have seen the largest increase are botox (51%), breast surgery (40%) and nose reshaping (27%).

“Despite cutting back across all other areas including: holidaying in the UK this summer instead of travelling abroad; and non-essential purchases, people are not cutting back on the money they spend on themselves,” says Liz Dale, from the group.

As the cost of living rises, 1.7 million adults are stepping in as a financial lifeline so that their elderly relatives do not have to face debt and struggle to maintain a good quality of life. New research by Engage Mutual Assurance show that 10% of adults are helping their retired relatives.

Of this figure, 22% are contributing to the cost of care or day-to-day expenses, and 33% have taken their parents into their own home in order to reduce the cost of living expense. These figures are worrying in itself, combined with the fact that a quarter of those surveyed fear that they will be unable to support their parents retirement, due to debt and finance worries.

Pension poverty is hitting more and more people due to a lack of preparation for their future as their pension fails to cover their outgoings, including energy bills and fuel prices.

Karl Elliott, spokesperson for  insurance provider Engage Mutual Assurance says: “With the size of Britain’s retired population growing, and costs of living increasing, it is important that people save little and often towards their retirement in order to reduce the pressure on themselves and their family to make ends meet in old age.”

Are you ‘always’ or ’sometimes’ feeling out of control with your finances? Then join the more than quarter of all Brits (27%) who feel the same way, according to new research by GE Money. Worryingly, a further 8% admit to regularly spending more than they earn, which could leave you with debt problems.

The research also reveals that the credit crunch is changing the way that we are spending our money, as 37% admit that their spending habits have changed in the last 12 months, as they try to spend less to remain debt free. But as the cost of living is rising faster than wages, it is no surprise that nearly 40% are struggling with their debt management, and have no money left at the end of their pay month.

However, this research did reveal some good news! 1 in 3 people claim that they are debt free, and 44% are saving between £1 – £500 each month.

A GE Money spokesperson said: “As we approach summer we are urging people to take an active interest in sorting out their finances. With the cost of living increasing this is no time to relax, it is important that people take stock and ensure they know exactly what they owe and when.”

Everyone knows that the cost of weddings can easily spiral out of control; the designer wedding dress, elaborate bouquet and the lavish after party means that many couples are feeling the pinch and need wedding debt advice after they have splashed out on their one special day.

According to recent research by You & Your Wedding magazine, the need for wedding debt advice may become more common as an average British couple  spends around £20,273 on their wedding, complete with a luxury honeymoon getaway and a no-expense spared reception. The average wedding cost was just over £18,750 in 2006, which represents an 8% increase.

Elaborate weddings are nothing new, even Roman emperors would hold week-long wedding celebrations, but these images are no longer ideals that are to be swooned over in glossy magazines, instead they are visuals that many are willing to emulate – complete with the hefty price tag. The average bride can expect to spend £1,927 including costs of wedding dress, veil and shoes. On top of this, the bride will spend an average of £109 on a going away outfit and £243 on new clothes for the honeymoon.

The WAG wedding of the summer between Wayne Rooney and Colleen McLoughlin is predicted to tot-up to the grand sum of around £5 million. Colette Harris, editor of You and Your Wedding magazine, explains:”There’s this sense that you have to have this enormous celebration with loads of guests and everything has to be blingy and that isn’t the case.”

5 Tips to Keep Your Wedding Costs Low

One Advice understand that although your wedding is bound to be the happiest day of your life, you don’t want to be paying for it for years to come. Debt Management is an important part of keeping to a sensible wedding budget. Now supposing that the typical bride and groom do not have a magazine photo deal to fall back on, here are some top tips about how to keep your wedding debt to a minimum:

1: Location, location, location: Think about holding the celebrations in a local church or registry office, rather than somewhere exotic. Or if you have always fancied a beach wedding, then think about combining it with your honeymoon so that doesn’t become an extra expense.

2: For Richer, Not Poorer: Taking out credit cards or loans to pay for your wedding just means that you are taking out debt! It is advisable to save up for your wedding in advance and have an ‘emergency fund’ so that you can cater for any unexpected costs. In fact, a survery by Norwich Union shows that 1 in 5 single women are already saving for their wedding day!

3: Guest List: Try and keep the guest list to a minimum and don’t fall into the trap of inviting your great-auntie-twice-removed, whom you haven’t seen since you were three! A small guest list will keep your costs down and will make it a more intimate event.

4: Your Wedding List: Many high-street stores now offer a wedding list service. Although this will not save you any money on the day, it will save you from having 10 identical coffeemakers! If you already live with your partner then chances are that you do not need anything for your home, so perhaps include a witty poem with the invite politely asking for honeymoon donations or gift vouchers so you can pick what you buy.

5: Discover the talents of friends and family: Is your friend a great photographer, hairdresser or brilliant at making cakes? Then ask them to help out at your wedding. Not only will they perhaps lower their costs or do it for free, it is likely that they will be more than honoured to have been asked and will be guaranteed to give your day a personal touch.

Got any tips on how to keep your wedding day debt free? Please add your wedding debt advice comments below.

As the number of repossession cases increase, more homeowners are being turned away from free legal representation. This is coupled with government research which estimates that 85% of homeowners who go to court with legal representation can avoid repossession, as those who fail to get proper legal advice tend to get a poorer agreement with their lenders.

Transact report that many homeowners who are in need of legal aid, are being turned away due to lawyers being overwhelmed with the rise of repossession cases. Just last month, the Ministry of Justice reported a 17% increase in the number of orders made by the courts in England and Wales at the early stage of the repossession process.

Faith Reynolds of Transact, the national forum for financial inclusion for individuals facing hardship or poverty, blames this problem as a direct result of the credit crunch, and commented: “Many of the homeowners facing difficulties are on relatively low incomes but not entitled to legal aid. The experience of Transact members shows that these people desperately need more help to protect their homes in court and they need it now.”

The FSA (Financial Services Authority) have launched a new website called “What About Money” in the aim to educate young Brits about their finances and how to take better control over their debt management issues.

This site is partly in response to new external research which shows that two-thirds of young people are not planning ahead financially and that 80% are in some form of debt by the time they hit 21. The website is broken down into different life stages, such as going to university or buying your first house, where a young adult is going to need advice about how to handle their finances.

The FSA describe it as a ‘one stop money information shop’ and Chris Pond, FSA director for financial capability said: “We want to help young adults feel more confident about managing their money and help ensure they believe that money is something they ‘can do’.”

Credit Crunch fears are forcing more employess to work over 48 hours a week. New research by the TUC (Trades Union Congress) reports that this figure has increased to 3.3 million workers this year, with the biggest increases were in construction, retail, the motor trade, finance and public administration.

This figure increased by 180,000 in the first three months of this year alone. This rise is being blamed on the current economic climate with employess working outside of their contracted hours as employers begin to recruit fewer new staff. The worst affected areas are the East of England and London.

General secretary of the TUC, Brendan Barber commented: “Employees across the UK already work the longest hours in Western Europe and the recent increase will mean lower productivity, more stress and less time to have a life outside the office with friends and family.” They have asked for the Government to back the Working Time Directive which contains proposals against excessive hours.

House prices may be falling throughout the UK but this is not enough for first time buyers. New research shows that more than one in four of those looking to get onto the property ladder are out priced in their local housing market.

Hometrack, the property information group, report that almost 30% cannot afford even the cheapest property prices in their area. In places this figure reached 41% in London to more than 50% in other areas.

These affordability issues are being blamed on rising mortgage costs, the banks unwillingness to lend and strong house prices compared to the average pay packet. Mortgage costs for first time buyers rose by 12% in 2007, meaning that almost 35% of a monthly wage will go to the mortgage payment.

Richard Donnell, director of research at Hometrack said: “Until such time as mortgage rates start to fall then lower house prices will be the only real driver of improved affordability for first time buyers.”

Worried that your household bills are more than expected? Then check your gas and electricity bills as a new report reveals that 9 million households (one in three) regularly get sent an incorrect energy bill.

uSwitch report that customer bills only match energy usage 26% of the time. The average consumer is in debt to their energy supplier by just over £135. More than 1 in 10 consumers owe their energy supplier between £201 – £500. But it could be your supplier that are in debt to you, as 40% of customers were owed money from their last bill.

These findings are being blamed on outdated meter technology, and uSwitch believes that these discrepancies will continue until smart meters are widely introduced throughout the UK. The advice to households is to keep an eye on their meter readings more regularly. “Relying on estimates is never a good idea as you could end up in debt or struggling with an unexpected bill” says Ann Robinson, Director of Consumer Policy at uSwitch.

Energy bills were not the only ones which were deemed the most inaccurate, others include tax bills from HM Revenue & Customs, council tax bills, water bills and communications providers bills for broadband/landline/digital TV.