Category Archives: Financial Management

Financial Management

Debts, Financial, Financial Management, Financial Services, Money, Personal Finance

Saving Is Important, But Debt Should Be Priority

Debt management company Gregory Pennington (www.gregorypennington.com) has welcomed news that more consumers are concentrating on putting money towards their debts rather than making savings, saying that this may make the best financial sense in the current economic conditions.

Gregory Pennington

However, the company added that consumers should be careful about where to draw the line, as savings can be a particularly important and useful aspect of people’s finances.

In Nationwide’s latest Savings Index, its senior economist Martin Gahbauer said that households were looking to increase the amount of money put towards their debt repayments “in response to the uncertain economic environment”.

He added that the negative level of housing equity withdrawal reported by the Bank of England earlier this month reflected this trend, and showed that households were using their available cash to reduce their mortgage balances more quickly, rather than spending it on non-essentials or putting it into a savings account.

Indeed, the Bank of England’s figures showed that in the final quarter of 2008, homeowners put a collective £8bn more towards their mortgage debt than they took out in equity withdrawals. It was the third consecutive quarter in which homeowners repaid more than they withdrew, although 2008 was the first year in a decade in which this had occurred.

A spokesperson for Gregory Pennington said that given the current state of the economy, repaying debt should be a priority for anyone who feels that their debt could become a burden.

“Debt repayments can be a burden on anyone’s finances, and that can become even more the case in times of financial hardship. In a time when many essential costs are rising, and when the risk of unemployment is higher than usual, reducing debt is particularly important.

“Even if a person’s debts seem relatively manageable now, a few unexpected events could change that. It’s essential that anyone who borrows money considers their long-term ability to repay the debt. Equally, anyone who finds themselves struggling should contact an expert debt adviser as soon as possible.”

However, the spokesperson added that savings are still very important, and people should look to save money whenever it is sensible to do so.

“Technically, it makes more sense to repay debt than save, even if that means using up those savings,” she said. “That’s because interest on debt nearly always grows faster than on savings, meaning that the person will spend less in the long run by tackling their debts first.

“However, being in debt doesn’t always mean people should avoid saving. If the borrower’s debts are entirely manageable – especially if their terms and conditions do not allow them to make overpayments – then there is no real reason why they should not put money into savings at the same time.

“Savings can offer a great deal of protection against debt, as well as long-term security. For example, a person who puts money aside every month is much better placed to manage any unexpected costs that may arise, or to get by in a period of unemployment.

“It can be difficult to decide whether it’s worth saving money or putting it towards debt repayments. We advise anyone who is unsure what to do with their money to seek free, impartial advice from a professional financial adviser.”

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Debts, Financial, Financial Management, Financial Services, Money, Personal Finance

Debt Advice Important For Struggling Borrowers

Responding to news that total personal debt levels in the UK have risen over the past year, Debt Advisers Direct have warned of the dangers of getting into debt in this difficult time for the economy, and advised anyone who finds themselves struggling to repay debt to seek expert debt advice.

Debt Advisers Direct

New lending figures released by the Bank of England this week revealed that total personal debt in the UK stood at £1.458 trillion at the end of February – a rise of £34 billion compared with the previous year.

That means that despite increased caution amongst financial institutions with regard to lending, the average UK adult has taken on approximately £680 in additional credit over the past year.

However, Bank of England statistics also show that the rate at which personal debt is growing has slowed compared with February 2008, when the total increased by £111 billion compared with the previous year.

A spokesperson for Debt Advisers Direct commented: “A £34 billion increase in total personal debt may surprise some people, given the relatively cautious nature of the lending industry over the past 18 months, even though it is only around a third of the levels seen in the previous year.

“On the one hand, it may suggest that the market for loans and mortgages is not as difficult as many people believed. Lenders have still issued a relatively large amount of money in the past year.

“On the other hand, it could also indicate that people are making more use of the credit they already had. For example, whereas people may have used their credit cards and overdrafts sparingly in the past, many people who have been put under pressure by the economic downturn may have found it necessary to spend more on credit.

This is fine in the short term, so long as those debts are repaid, but if the borrower can not afford to repay those debts in full, then the situation can become more serious.”

The spokesperson added that consumers could benefit from avoiding getting into debt wherever possible, and ensuring that they promptly pay back any credit they do use.

“With more people currently at increased risk of redundancy or a reduction in income, it makes sense for people to ensure that their finances are well prepared for the future. For most people, that should involve reducing debts wherever possible.

“Of course, that is difficult for people whose finances are already stretched to their limits. We have seen massive rises in many essential costs of living over the last 18 months, which have led to many people falling behind on their commitments.

“That’s where a professional debt adviser can help. There are a number of debt solutions that can help people in difficult financial situations to reduce their debts and make their monthly outgoings a lot more manageable. It’s important that anyone who finds themselves struggling to repay their debts seeks debt advice as early as possible to prevent the problem from becoming any worse.”

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Workers Must Ensure They Are Prepared For Pay Cuts Says Gregory Pennington

In response to a new report claiming that 70% of UK companies may be planning to freeze or cut wages this year in an attempt to get through the recession, debt management company Gregory Pennington has advised workers to take what steps they can to prepare for any potential reduction in income.

The company added that anyone with debts to their name could be at a disadvantage if their income is reduced, and as such they should look to address their debts as a matter of priority.

The latest monthly business survey by the British Chambers of Commerce (BCC) claimed that of 400 companies questioned, around 70% planned to freeze or cut wages later this year.

58% of companies said they planned to freeze wages this year, while 12% planned to actively reduce wages.

Most of the rest of the companies, however, planned wage increases of between 1% and
3%, with almost one in ten companies saying they would raise wages by more than 3% –
suggesting some areas of business are not struggling, despite the recession.

Even so, half of the companies were considering making staff redundant in the next six months in an attempt to survive the economic downturn, according to the survey.

A spokesperson for Gregory Pennington said that despite some surprising optimism amongst the 9% of companies which would be raising salaries, most people would be best advised to ensure that their finances are as healthy as possible in preparation for the next few months.

“We are in a difficult situation, in which many costs of living are rising rapidly while the equity in our homes is falling. Along with the prospect of high levels of unemployment, it’s unclear whether the situation will get better or worse in the coming months.

“In any situation involving that kind of uncertainty, it’s especially important that people are quick to ensure that their finances are in the best possible shape for getting through potentially difficult times.

“Perhaps the most important factor is savings. People with savings have a ‘safety net’ they can fall back on if they find their finances are hit particularly hard, and this could help families and individuals alike to compensate for any reduction in income.

“However, getting on top of any debts is also very important – and if the borrower has savings they can fall back on, it’s often most important that those savings are used to repay their debts. The logic behind this is simple – the interest on debt usually grows more quickly than the interest on savings, so the borrower will spend less overall by paying off their debts as quickly as possible.

“However, workers need to consider this carefully. If they are facing potential redundancy, they may wish to hold on to their savings so that they can continue to repay their priority debts, such as their mortgage.”

The Gregory Pennington spokesperson added that there are many people who may be experiencing problems with debt who do not have any savings to fall back on – and those people should seek debt advice as soon as possible.

“A lot of people may be facing a reduced income or even redundancy with little or no savings. If those people also have debts to repay, the situation can be quite worrying.

“However, a professional debt adviser can help people to find the best way of tackling their debts – which can offer a lot of relief in difficult times.”

Via EPR Network
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Assets, Financial, Financial Information, Financial Management, Financial Services, Financial Solutions, Home Equity, Insurance, Money, Mortgage, Retirement

£611 Billion Equity In Homes Owned By Over 65s

Prudential has revealed findings from its latest Equity Release Index* which show that despite falling house prices and the current economic climate, homeowners aged 65 and over have £611.5 of equity in their property.

These significant amounts of property equity contrast with the current squeeze on retirement income being seen in today’s volatile market and economic conditions where rates on annuity and income drawdown products are falling.

Individuals buying guaranteed annuities, for example, have seen rates fall by up to 10 per cent since the middle of last year and Prudential believes this fall emphasises the need for pensioners to look at all potential sources of investments and retirement income.

Property equity can deliver a valuable income, especially against the current backdrop of low interest rates and equity price falls of around 30 per cent over the past two years which have hit many pensioners’ non-pension savings.

Prudential’s Index, which tracks the amount of home equity owned by people aged 65 and over in England and Wales, found that 42.5 per cent of this equity belongs to those living in London and the South East.

The Index also reveals that the value of property equity belonging to homeowners aged 65 and over fell by £80.6 billion between October 2008 and January 2009, with the average homeowner over 65 seeing the value of equity they have in their home fall by £21,377.

London homeowners aged 65 and over saw the highest decline for any region in England and Wales with equity in their homes falling by £38,057 while those in Yorkshire and Humberside experienced a decrease in value of £13,028.

Keith Haggart, Director of Lifetime Mortgages at Prudential, said: “Every homeowner is being affected by falling property prices, but it’s important to remember that many people, especially retired homeowners, bought their homes years ago and have benefited from past growth in the housing market. Even in this depressed market, the vast majority of retired homeowners still have considerable wealth tied up in their properties.”

He continued, “Equity release has an important role to play in providing retirement income particularly when other sources are under pressure.

“Annual figures from SHIP (Safe Home Income Plans) show that equity release sales in 2008 were almost £1.1 billion and were just nine per cent lower than 2007, despite the collapse in the wider mortgage market.”

Equity release schemes can be an excellent way to help retirees to secure an income, and any provider who is SHIP registered provides a no-negative equity guarantee as well as guaranteeing that the mortgage interest rate is fixed for the term of the loan.

 

* Prudential’s Equity Release index tracks the amount of equity held in property by people over 65 years old in England and Wales. Figures are based on Prudential’s analysis of data from the ONS Family Spending Report (2006), the Land Registry House Price Index (August 2008) and GfK NOP (2007). Specifically, weighted number of households data is taken from the ONS Family Spending Report 2006. Home ownership data is taken from the NOP data. Average house price per region is taken from the Land Registry Index.

About Prudential:
“Prudential” is a trading name of The Prudential Assurance Company Limited, registered in England and Wales. This name is also used by other companies within the Prudential Group. Registered Office at Laurence Pountney Hill, London EC4R 0HH. Registered number 15454. Authorised and regulated by the Financial Services Authority.

Find out more on Prudential’s product range including endowments and equity release schemes, including equity release mortgages on the Prudential website, www.pru.co.uk.

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Checking & Savings, Debts, Financial, Financial Information, Financial Management, Financial Services, Financial Solutions, Loans, Money, Mortgage, Personal Finance

The Importance of Keeping on Top of Mortgage Payments

Responding to the news that the number of homeowners falling behind on their mortgage payments has risen by almost a third (31%) in the past year, debt consolidation company DebtAdvisersDirect.co.uk has emphasised the importance of keeping on top of mortgage payments, adding that a mortgage should be the top priority for any homeowner.

The company added that borrowers who are having difficulty with their mortgage payments should seek expert debt help as soon as the problem emerges.

The latest figures from the FSA (Financial Services Authority) showed that there were 377,000 borrowers in arrears on their mortgages at the end of 2008 – up 10% in the final quarter alone, and 31% higher than the same period in 2007.

The figures refer to mortgage accounts in arrears by 1.5% or more of the borrowed balance, roughly equivalent to arrears of at least three months.

The figures mean that 3.4% of all mortgages were in arrears at the end of 2008, compared with 2.3% at the end of 2007. Meanwhile, new repossessions increased by 60% compared with the same time period in 2007.

A spokesperson for Debt Advisers Direct said: “We would expect an increase in the number of homeowners falling behind on their mortgage debt in recent months, but these statistics show just how quickly it is occurring.

“Considering the economy is potentially about to enter a more severe stage of the recession, it’s very important that homeowners are careful with their finances and avoid falling behind on their debt repayments.

“In particular, a mortgage should be the number one priority for any homeowner. It is important that all debts are repaid on time, but a mortgage pays for the borrower’s home – and as such, failing to keep up on payments could eventually result in the home being repossessed.”

The spokesperson also said that if other debts are making it difficult to pay the mortgage, a professional debt adviser may be able to recommend a suitable debt solution that could make the borrower’s unsecured debts more manageable.

“There are few debt solutions that deal directly with mortgage repayments, although in some cases a debt adviser may be able to negotiate with mortgage lenders for a reduction in payments. However, a debt solution that deals with the borrower’s unsecured debts could reduce the homeowners monthly outgoings, and therefore make it easier for them to meet their mortgage payments.”

The Debt Advisers Direct spokesperson added that if the situation becomes more serious and the homeowner cannot see a way of repaying their debts in full, an IVA (Individual Voluntary Arrangement) could help them avoid bankruptcy by paying off an agreed percentage of their debts, and therefore help them avoid losing their home.

“If the homeowner can agree a repayment plan for their mortgage arrears, then an IVA can be arranged around that, meaning both the homeowner’s mortgage and their unsecured debts are taken care of.”

However, the spokesperson was keen to emphasise the importance of speaking to a professional debt adviser before deciding on any debt solution.

“Different debt solutions are more appropriate for people in different situations, and equally they all have their drawbacks. An expert debt adviser can help to explain the pros and cons of each debt solution, to help the borrower in establishing which debt solution is best suited to their individual needs.”

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Debts, Financial, Financial Management, Financial Services, Home Equity, Loans, Money, Mortgage, Personal Finance

Mortgage Debt: Comment On Housing Equity Injection

Responding to news that homeowners had injected a record £8 billion into housing equity in the final quarter of 2008, debt management company Gregory Pennington stressed that this reversal of a long-term trend was due to a combination of factors, rather than any single event.

“Prior to Q2 2008,” said Melanie Taylor, Head of Corporate Relations for Gregory Pennington, “the last time we saw homeowners injecting money into housing equity was in Q2 1998, when they injected £279 million – a mere 3.5% of the amount injected in the final quarter of 2008.”

In the decade following 1998, of course, the average house price virtually tripled, which obviously enabled millions of homeowners to turn many billions of housing equity into cash. The highpoint of this occurred in Q4 of 2003, when £17 billion of equity was withdrawn – a full 8.5% of post-tax income.

A full decade of rapid price rises meant that homeowners were both willing and able to keep on withdrawing equity for some time after the house price boom came to an end in 2007: it wasn’t until the second quarter of 2008 that equity injections began to outweigh withdrawals.

“Standing at £1.8 billion in Q2, quarterly equity injection rapidly soared to the record level of £8 billion by Q4 – thanks to a falling base rate and a faltering housing market, as well as worries about the recession in general.

“Plummeting from 5% to 2% in Q4 alone, the falling base rate had two crucial effects on the way homeowners treated their mortgage debt. First of all, it helped people find new deals with lower monthly payments, and enabled people with existing tracker and SVR mortgages to overpay their mortgages without spending more than they were used to. Second, it led the banks and building societies to drop the rates they were paying on savers’ accounts. Many people looking for the best return on their ‘spare’ money realised that overpaying their mortgage would be much more valuable in the long run than putting their money in a savings account.

“Looking beyond interest rates and house prices, the recession itself has prompted a more conservative attitude, particularly among people who’ve experienced recessions in the past. The news has been full of repossessions, redundancies, ‘awful’ economic conditions – and a succession of dire predictions from a wide range of respected bodies, making it clear that things were expected to get a lot worse before they got better.”

Whatever the reasons, overpaying the mortgage can deliver various benefits: “Aside from reducing the amount of interest they’ll pay over the lifetime of the mortgage, overpayments can also shorten the actual term of the mortgage, meaning the homeowner will own the property outright sooner than initially expected. There’s also the question of reducing their mortgage debt and increasing the equity in the home, which can give homeowners access to mortgage deals with much lower interest rates – something which many will be keen to do as soon as possible, before the base rate has a chance to start rising again.”

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The Importance Of Getting Debt Help At The First Sign Of Financial Difficulties

Debt management company Gregory Pennington has emphasised the importance of getting debt help at the first sign of financial difficulties, following research showing that the average UK worker spent the first 83 days of 2009 earning just enough to cover the interest on their debts.

Unbiased.co.uk have said that March 25th was this year’s ‘Debt Freedom Day’ – a theoretical date on which the average UK worker’s earnings have covered the amount they will pay in interest on their debts (not including mortgages) over the course of the year.

The date came more than two weeks later than last year’s Debt Freedom Day, which fell on Ma rch 2nd 2008. This means that debt levels amongst people in the UK have risen, despite increased caution amongst lenders.

Unbiased.co.uk’s figures showed that personal loans borrowed in 2008 amounted to £11.6bn in 2008 – up by more than £1.6bn on the previous year. Meanwhile, mortgage debt from equity release loans increased by £6.5 billion. Debt on credit cards, however, fell by £4.9bn.

A spokesperson for Gregory Pennington commented: “We can look at lending figures from recent years and see how much personal debt has risen, but the amount of time it can take to repay the interest on those debts may surprise some borrowers.

“It’s also worth remembering that this is before the borrower has started repaying the actual debt, which suggests that a lot of people may be spending a considerable proportion of their annual income repaying debts.”

Debt Freedom Day works on a similar basis to ‘Tax Freedom Day’, recorded by the Adam Smith Institute, an economic think tank. Last year’s Tax Freedom Day fell on June 2nd – meaning that if these figures are combined, the average UK worker spends almost three quarters of their annual income on tax and debt interest.

The Gregory Pennington spokesperson said that the figures not only show how much the average UK worker spends on debt interest each year – they also show how much better off they could be once those debts have been taken care of.

“Especially in difficult times for the economy, reducing debt can ensure that people are well-prepared for what the future may hold. If costs begin to rise sharply, or any other unexpected financial events occur, people who are in debt are more likely to struggle. If that results in the borrower missing debt repayments, the situation can become quite serious.

“The fact that interest rates have fallen sharply in recent months will help some people – particularly those who have experience a fall in their mortgage costs – but for situations that have become more serious, finding the right type of debt management could make a big difference.

“We advise anyone who is struggling to repay their debts to seek professional debt help at the first sign of difficulty. A debt adviser can discuss the borrower’s situation in confidence and, if necessary, recommend a suitable debt solution for their personal circumstances.”

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Lloyds TSB study highlights the plight of the 13.5 million recession novices in the UK, as the financial recession hits the real economy

According to a new study* from Lloyds TSB the current economic downturn is the first recession which over one in four of British adults** have experienced in their adult life. While recession veterans are realistic about what to expect, these recession novices are more optimistic and less prepared to change their lifestyles.

The report found 21% of all Brits – regardless of past experience – felt the current climate has led them to suffer from ‘recession depression’. 17% claimed they had sleepless nights worrying about personal finances and 36% are spending more time at home.

The report indicated that a third of recession veterans feel better prepared for today’s economic woes because they have lived through a downturn before, although 44% acknowledged it feels very different to last time. Many said their confidence comes down to better financial management. 68% felt better prepared because they are more careful and don’t overspend (compared to 57% of novices) and 66% said they are better prepared because they don’t rely on credit to fund their lifestyles. 56% of those with recession experience simply thought they were more realistic than younger generations about how much they can spend.

Corinne Sweet, Psychologist and author commented: “When times are bad and money is tight, people experience fear and anxiety, making them more conservative and less adventurous and expansive overall. Recession novices will be feeling the greatest shock, and worrying about how to maintain their lifestyles while paying off debts, while those that have lived through it before will probably cope better, reverting to old methods of survival.”

Recession veterans are taking sensible steps to rein in spending, like buying cheaper brands (42%) and becoming more frugal. Novices are less prepared to take drastic steps. Just 24% admitted drastically cutting their spending (compared to 30% of old timers) and only a fifth are becoming more frugal compared to 39% of recession old timers. Recession novices are also less prepared to cut back on holidays and breaks away with 19% cutting back compared with a quarter of recession veterans.

To help customers during this difficult period, Lloyds TSB has created a guidance microsite for people looking for financial help. Savvy Guidance is an online resource providing useful tips and information on managing finances in the current climate, along with interactive explanations of the credit crunch, a jargon buster, FAQs and real life video stories showing how the guidance and support from a financial health specialist, can help in times of financial difficulty.

Throughout the country 1,500 financial health specialists are also on hand in Lloyds TSB branches to help customers review their finances, manage their money better and givetailored guidance and support.

About Lloyds TSB:
Lloyds TSB offers customers a wide range of current accounts, savings accounts, insurance, personal loans and credit cards, designed to meet different customers’ needs.

Lloyds TSB Bank plc and Lloyds TSB Scotland plc are authorised and regulated by the Financial Services Authority and signatories to the Banking Codes.

Lloyds TSB Bank plc Registered Office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no. 2065.

Notes to editors:
* Opinium Research carried out an online poll of 2,221 British adults from 30th January to 3rd February 2009. Results have been weighted to nationally representative criteria. 
** Based on UK population figures and that anyone aged 34 or below will not have been an adult during the last recession (1992). This equals 13,580,000 UK adults (28.3% of 47,778,000 UK adult population) who have not lived through a recession before in their adult life.

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Managing Debts When The Economy Slumps

Responding to the Fourth Quarter Economic Survey from the British Chambers of Commerce (BCC), debt management company Gregory Pennington stressed that negotiating with lenders is an important part of dealing with (and preparing for) the kind of ‘tough times’ that the Survey spells out.

“Most economic reports contain a mixture of good and bad news,” said a spokesperson forGregory Pennington, “but the BCC has stated – in black and white – that ‘There are nopositive features in the Q4 results’, going on to use words like ‘awful’, ‘terrible’ and‘alarming’. There’s no point in being overly negative, but the report clearly spells out that last year ended badly – and that businesses throughout the UK are in for a rough 2009.

“Every time a business fails, this inevitably has a negative impact on consumers’ finances – not just its actual employees, but everyone connected to the business, from its suppliers to its commercial customers. Everyone who depends on that business for all or part of their income will have to make the necessary adjustments to their lifestyle, until they can find a way to raise their income once more.

“During a period of economic turmoil and high unemployment, carrying debts can beparticularly dangerous. Anyone entering a period of unemployment with significant unsecured debts to their name is far more likely to run into difficulty almost at once: as well as paying for essentials such as mortgage / rent, utilities, food, petrol, etc., they’ll need to stay on top of payments to their unsecured debts – payments which have suddenly become much harder to afford.

“When someone (whether employed or unemployed) can’t keep up with their debt repayments, this can lead to charges and legal action, and can draw them into a ‘spiral’ of debt, in which all their efforts to reduce the debt aren’t enough to keep pace with the rate at which it’s growing. Negotiating with lenders – through a debt management plan, for example – can help them avoid this, as their lenders may agree to accept lower monthly repayments, waive charges and freeze or reduce interest.”

“Of course, surviving a period of unemployment will be easier if they’ve taken precautionary steps beforehand – perhaps when they hear warnings from organisations such as the BCC, the International Monetary Fund or the International Labour Organization. For example, some people may attempt to overpay their mortgage so they’re in a better position if they need to take a payment holiday later on. Others may choose to concentrate on their credit card debt or overdraft, trying to reduce the monthly cost of servicing their debts, as well as the overall debt itself.

“They may not be able to clear their debts altogether, but that doesn’t mean they can’t make a good start. The more progress they can make, the easier it will be to cope if they are made redundant – and if they aren’t, they’ll still benefit from reduced interest payments and increased financial security.”

Borrowers who do end up losing their job may find that a debt management plan could help them adapt to living with a reduced income more quickly. “Their debt managementrepresentatives will be able to talk to their creditors, trying to re-negotiate lowerrepayments that reflect their lower income. In many cases, lenders would recognise thattemporarily accepting lower payments (if necessary, nominal payments) could help theborrower cope until they could find new employment – or to get back on top of their debtsonce they have found it. After all, in the vast majority of cases, it’s in everyone’s interest to ensure the borrower has an opportunity to repay their debts, rather than beingdeclared bankrupt.”

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Debt Advisers Direct have responded to new figures showing that UK gas prices have increased at over four times the rate of the European average, emphasising the importance of good financial management

Responding to new figures suggesting that British energy bills are rising four times faster than those in Europe, Debt Advisers Direct have advised consumers to take extra care over their finances – particularly with regard to repaying debts – and have said that anyone who finds themselves struggling with their debts should seek expert debt advice as soon as the problem emerges.

The figures, compiled by the Organisation for Economic Co-operation and Development (OECD), showed that energy prices have risen by 16.7% in Britain over the past year – over four times as much as the 3.8% average across Europe.

The OECD recorded a 1.3% rise in Denmark, 1.5% in Germany and 5.3% in Sweden. Of the developed nations studied, only Australia (20%) and Turkey (28.7%) experienced bigger price rises than the UK in the past year.

Energy companies have come under fire in recent months over their energy pricing –despite significant falls in the wholesale cost of gas and electricity, none of the major companies have cut their prices to consumers.

A spokesperson for Debt Advisers Direct said: “The OECD’s report demonstrates the extent to which UK energy prices have risen compared with other nations. A lot of billpayers have felt unfairly treated by their energy providers in recent months, and this news may have many wondering why the companies haven’t acted to reduce their prices yet.

“Scottish Power have recently announced a 10% cut to one of their gas tariffs, and other companies are likely to follow suit – but this cut does not cancel out the two big price rises made by most companies last year.”

The spokesperson added that a large number of people are still struggling to meet their financial commitments as a result of rising prices in the past year, with many of those experiencing debt problems.

“A combination of rising bills, rising costs of living and shrinking incomes have left many people struggling with their finances,” she said. “Some of those costs are starting to come down, but that won’t necessarily help those already in debt.

“Our advice to anyone in debt is to seek expert debt advice early. Even if living costs do come down, debt can still be a big burden and it’s important to tackle it in the right way.

“For people who want to reduce their monthly outgoings and simplify their finances in order to make their bills and debts more manageable, a debt consolidation loan might be the answer. A debt consolidation loan involves the borrower taking out a new loan to pay off their existing debts – effectively consolidating the debts into one.

“Most people who take out a debt consolidation loan lower their debt repayments by spreading them out over a longer period of time. Although this incurs more interest in the long run, it’s possible to save money in interest overall if the borrower is consolidating debts with a higher APR than the new loan.

“For more serious debts, a debt management plan could help. This is an informal agreement between the borrower and their creditors as to how the borrower intends to repay their debts – usually at a slower rate than originally agreed, and there may also be a freeze on interest and other charges.

“Alternatively, if there is no real chance of ever repaying the full debts in a realistic period of time, an IVA (Individual Voluntary Arrangement) may be the best option. An IVA is a legally-binding agreement between the borrower and their creditors for lower monthly payments, based on how much the borrower can afford.

”For an IVA to go ahead, creditors accounting for 75% of the total debt must approve the proposal. An IVA usually lasts for five years – and homeowners may be expected to release some of the equity in their homes in the 54th month of the IVA. On successful completion of the agreement, the remaining debts are considered settled.”

“Our advice to anyone unsure about how to tackle their debts is to speak to a debt adviser beforehand.”

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Quest CE announces the hiring of Marcy Kalat as Vice President of Business Development for Quest

Quest CE’s President & CEO, Alan Krenke recently announced the hiring of Marcy Kalat as Vice President of Business Development for Quest. Marcy brings over 15 years of Sales and Relationship Management experience to Quest working previously for RegEd and FIRE Solutions Inc. as Vice President of Sales, Penton Media as an Account Executive and UConnections.com as Area Sales Manager.

Marcy received her undergraduate degree in Social & Behavioral Science from Indiana University. Marcy’s industry affiliations include the National Society of Compliance Professionals and the Securities Industry & Financial Markets Association.

Marcy will be working directly with Quest’s Sales and Marketing Team to aggressively expand Quest’s market share in the continuing education arena .leading Quest to become the premier provider of compliance technology solutions.

Marcy resides in San Rafael, CA with her husband Peter and daughter Marley and their chocolate lab Maggie. She is active in her community as a volunteer and is a member of the National Charity league.

Marcy can be reached by phone at 877-593-3366 or mkalat@questce.com.

About Quest CE:
Quest CE offers customized continuing education and online compliance management programs to financial service firms across the country. With over 100 clients in the insurance, mutual fund, broker-dealer and banking industries, Quest has the resources and expertise necessary to create and administer successful training programs for organizations of all sizes. For more information about Quest CE you may also contact Quest CE at 877-593-3366 or visit our website at www.questce.com.

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Many Homeowners Stand To Benefit From January’s Base Rate Cut

Following the Bank of England’s latest base rate cut to 1.5%, financial solutions company Think Money have said that many homeowners will benefit from the cut, adding that those who may not receive the benefit of the base rate cut due to mortgage collars could still save money if they remortgage.

The half-point base rate cut brings the base rate down to its lowest level since the Bank of England was established in 1694. It is the fourth cut in as many months, and the seventh consecutive base rate cut since December 2007, shortly after the credit crunch began.

The cut is a further attempt by the Bank of England to revive the market for loans and mortgages, both of which are important to the health of the economy. Despite recent sharp base rate cuts, many lenders have remained cautious with regard to their lending, while many banks have simply been unable to obtain the funds necessary for normal levels of lending.

A mortgage expert at Think Money said that on the whole, the cut is good news for the mortgage market. “In theory, a cut means that lenders can afford to offer mortgages at lower rates, which is good for homeowners. People on tracker mortgages will automatically benefit, unless they have reached their mortgage collar, and lenders may consider reducing their fixed-rate mortgages too.

“However, there is some pressure on mortgage lenders due to the LIBOR rate, which is still higher than the base rate – meaning that some of the funds lenders rely on for mortgages are more expensive than it may first appear. That may explain why a number of lenders raised the interest rate margins on their tracker rates in anticipation of this base rate cut.”

The Think Money spokesperson added that now could be a very good time for existing homeowners to remortgage, as well as a good opportunity for first-time buyers to make their first purchases. “A remortgage could save existing homeowners a lot of money, especially those who started fixed-rate deals in the last two-to-three years. Switching to a tracker deal could greatly reduce homeowners’ monthly payments, until rates begin to rise again, and many fixed-rate mortgages are cheaper than they have been in recent years.

“At the same time, we are in a situation where houses are falling in price, and interest rates are relatively low, both of which mean mortgage payments are likely to be lower than they were, say, two years ago. For that reason, it can be a good time for first-time buyers to make a move.

“Many first-time buyers are put off by the idea that mortgages are difficult to obtain. It’s true that they are more difficult to obtain than at the height of the mortgage market in 2007, but they are still very much available – it can sometimes just take a little longer to find the best mortgage deals.

“Anyone looking for a mortgage should make sure they receive expert mortgage advice beforehand. Speaking to the right people can help homebuyers to find the best rates and the best type of mortgage for their circumstances.”

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New Research Shows That 15% Of Homeowners Taking Out A Remortgage In Late September And Early October Either Had Deals Turned Down Or Moved Onto Their Lender’s SVR

Financial solutions company Think Money have advised homeowners who are looking to remortgage that speaking to a professional mortgage adviser has become more important in recent months, as the availability of mortgage deals has remained lower than 2007 levels.

The new NMG Research Survey, carried out for the Bank of England, showed that at the end of September and beginning of October, 15% of people who had taken out a remortgage had previously either had applications turned down or had moved onto their lenders’ standard variable rate.

Standard variable rate mortgage deals – a lender’s basic mortgage rate – tend to be noticeably more expensive than the lender’s discounted variable-rate mortgages at any given time, according to a mortgage expert for Think Money.

“Most mortgage deals advertised in the shop window or online are introductory deals,” she said. “Fixed-rate mortgages are usually priced based on the lender’s own long-term projections, but most new variable-rate deals are actually discounted from the standard variable-rate. So the only time homeowners will usually pay the standard variable-rate is when the pre-agreed terms finish – unless they remortgage.”

The Think Money spokesperson added that the recent base rate cuts by the Bank of England have meant that remortgaging can save homeowners a significant amount of money.

“The base rate has fallen from 5.75% to 2% in just under a year and a half, and while mortgage rate cuts have not been quite so pronounced, they still represent good savings for people who entered mortgage deals two or three years ago.

“For example, while at the peak of the market in July 2007 the best mortgage rates stood at around 6% to 6.5%, we are now typically seeing rates of 4.5% to 5%, and even 4% for homeowners with a particularly high LTV (loan-to-value) ratio.

“To put that in perspective, on a typical £120,000 mortgage, a homeowner moving from a 6% interest rate to 4.5% can save around £104 per month, or £1248 per year.

“What’s more, many economists are predicting further base rate cuts – so homeowners with tracker mortgages could benefit even more in the future.”

The spokesperson was keen to emphasise the importance of mortgage advice in the current market. “With lenders still cautious about offering mortgages, it can take a little longer to find the right mortgage deal compared with, say, 2007. That may explain why so many people questioned for the Bank of England’s report had been turned down by some lenders.

“A professional mortgage adviser can take a look at the homeowner’s circumstances, and based on that can search a range of lenders for the best mortgage deal available to the homeowner.”

The Think Money spokesperson urged homeowners to consider their remortgage deal early to allow plenty of time to find the best rates. “It’s often possible to‘reserve’ mortgages with lenders, so if the homeowner likes the look of a deal a little while before their current mortgage terms finish, they can ensure they get the lower rate later in the year. Of course, it’s possible rates could fall more, so homeowners may want to wait and see what happens in the mortgage market before making a move.”

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New Report Suggests That The Available Incomes Of Households Have Fallen Significantly Over The Past Year

Responding to a recent report suggesting that the average household had found it more difficult to repay their debts in 2008 than in the previous year, Debt Advisers Direct have warned consumers to take extra care with their finances. In financial terms, January can be a particularly difficult time, as many households find they’ve spent more than intended over the Christmas period – and Debt Advisers Direct have advised people struggling with debt to seek professional debt advice as soon as possible.

A new report for the Bank of England entitled ‘The financial position of British households’, carried out by NMG Research, is a snapshot of the financial situations of the average British household at the end of September and beginning of October.

The report claimed that the average household had found it more difficult to service existing debts than in the previous year, largely due to higher household bills which reduced ‘available’ incomes. It also said that the purchasing power of this available income had reduced due to high inflation.

More than half of the households in the survey had reported a fall in their monthly available income compared with the previous year.

In total, of those questioned:

• 31% reported a fall of more than £100 per month,
• 20% reported a fall of £51 to £100,
• 12% reported a fall of £1 to £50,
• 25% reported no change, and
• the remaining 12% reported an increase in ‘available’ income.

A spokesperson for Debt Advisers Direct commented: “It’s been known for some time that British households have been under pressure financially in the past year, but these figures demonstrate the extent of the problem. In particular, a drop in available income of more than £100 can make a significant difference to the ability of households to meet their commitments and repay debts.”

The fall in available income was particularly evident amongst homeowners. In both high-LTV and low-LTV categories, 39% of mortgagors reported a fall of more than £100, while a further 19% reported a fall of £51 to £100.

The report suggested that this may have been due to homeowners experiencing higher mortgage costs, especially those who came to the end of fixed-rate or discounted variable-rate mortgage deals.

“Due to rising mortgage costs earlier in the year, homeowners have been particularly
hard-pressed, although this situation may have eased since the figures were recorded due to base rate cuts and the subsequent lower mortgage rates,” the Debt Advisers Direct spokesperson said.

“The implications for homeowners are potentially more serious, since homeowners stand to have their homes repossessed if they default on mortgage payments. Homeowners who are paying relatively high interest rates could improve their situations through remortgaging, although they should consider any costs involved.”

The Debt Advisers Direct spokesperson added that there are a number of debt solutions available that could help those who have experienced a fall in available income.

“For people with several debts who want to reduce their outgoings and simplify their
finances, a debt consolidation loan might be the best option,” she said. “By spreading the repayments out over a longer period of time than the original debts, monthly payments can be lower, which can make a big difference to available income. However, more will be paid in interest as a result of the longer repayment period.

“For those with more serious debts, particularly if the repayments exceed the household’s available income, a debt management plan could help. This involves working with a debt adviser to negotiate lower monthly payments based on how much they can afford. However, a debt management plan will normally require people to pay whatever available income they have left after payments to household expenses have been taken into account, so anyone entering a debt management plan should be fully committed to repaying their debts.”

For debt help and advice on a range of debt solutions, visit the Debt Advisers Direct website or call 0800 074 8639.

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Sameer Al Ansari Of Dubai International Capital Recognised At 2nd Annual Private Equity World Awards MENA 2008

Dubai International Capital LLC (‘DIC’) has announced that its Executive Chairman and Chief Executive Officer, Sameer Al Ansari, was honoured with the ‘Special Merit Award for Outstanding Contribution to the Industry’ at the 2nd Annual Private Equity World Awards MENA 2008 for his invaluable contributions to the regional private equity sector. The coveted recognition from industry peers was presented to Sameer Al Ansari for the second consecutive year at a ceremony held in Dubai.

In addition to recognising Al Ansari for his leading role in the development of the private equity industry, the distinction also reflects the increasingly influential role of Dubai International Capital, the international investment company that Al Ansari helped establish in 2004.

Organised by Terrapinn, a business media company, the Private Equity World Awards MENA 2008 recognises leaders, entrepreneurs, innovators and pioneers in the MENA private equity and venture capital industries.

Sameer Al Ansari said: “It is a privilege to receive this prestigious award for the second year running. It is not only an honour to have been chosen, but the award is a testament to the talent and expertise of DIC’s team who have contributed to building DIC into a well-respected name in the private equity sphere within a span of four years.”

Sameer Al Ansari is the recipient of several accolades, including the ’50 Most Influential People in Private Equity’ by Private Equity International (2007) and the Young Arab Leaders (YAL) Award from Mohammed Bin Rashid Al Maktoum Establishment for Young Business Leaders (2005).

Symon Rubens, Managing Director, Terrapinn Middle East, said: “Terrapinn would like to congratulate Mr Al Ansari on his outstanding work and contribution to the private equity industry. Our mission is to identify and reward those individuals, teams and companies who have demonstrated an unparalleled ability to succeed and it gives us great pleasure to celebrate their remarkable accomplishments.”

Under Al Ansari’s leadership, DIC has emerged as a leading investment company in the private and global equities markets with an outstanding reputation and track record. Earlier this year, DIC was named MENA Private Equity Firm of the Year in the 6th annual Awards for Excellence in Private Equity Europe 2008, organised by Dow Jones Private Equity News.

About Dubai International Capital LLC: 
Established in 2004, DIC is an international investment company with offices in Dubai and London focused on both private equity and public equity. A wholly-owned subsidiary of Dubai Holding, DIC manages an international portfolio of diverse assets that provide its stakeholders with value growth, diversification, and strategic investments. Assets under management total over US$13 billion.

Among the many accolades, DIC’s Executive Chairman and CEO, Sameer Al Ansari, is also the recipient of numerous industry awards including, Special Merit Award for Outstanding Contribution to the Industry for two consecutive years (2007, 2008) by PE World MENA Awards and was ranked as the 11th most powerful Arab in the world by Arabian Business

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Lloydstsbcompare.Com Raise Public Awareness Of The Need To Tackle Household Bills Ready For The New Year

Skyrocketing energy costs have been a prime concern for many Brits in 2008 but switching suppliers could save a typical household up to £454 – that’s £7,384 million across the entire country.

To help raise awareness, LloydsTSBCompare.com declared December 30th to be ‘tackle your bills day’ to encourage people to assess their household bills and save money in 2009.

According to research by LloydsTSBCompare.com, 80 per cent of people have seen a rise in their energy bills this year. Over one in four (27 per cent) of UK households saw their energy bills rise by more than £40 per month and 30 per cent think they could rise by a further £40 per month this winter.

Despite the pressure from rising bills, one in three (36 per cent) households has never switched energy providers and one in four believes shopping around will not make any difference. But those who have used comparison sites to switch providers have, in recent months, benefited from average annual savings of £284.

By using a comparison site such as LloydsTSBCompare.com customers can compare gas and electricity, telephone and broadband providers, as well as travel and car insurance. The site also has supermarket and petrol price checkers, helping customers to secure the best deals in and around their local area.

Steve Grainger, LloydsTSBCompare.com, said: “A concerning 40 per cent of Brits said they don’t know how they will cover their bills if prices continue to increase. December 30 was the perfect day for us all to concentrate on getting on top of our finances for the New Year. LloydsTSBCompare.com gives customers all the tools they need to cut their household bills and save money.”

Stealing the crown from TescoCompare, LloydsTSBCompare.com was recently named ‘Britain’s best car insurance comparison site‘ by Defaqto, the independent product research company.

The ‘tackle your bills day’ declaration comes at a time when many UK households are feeling the pinch and LloydsTSBCompare.com hope it will encourage homeowners to push sorting out their personal finances higher up the list of new year’s resolution for 2009.

About LloydsTSBCompare.com:
LloydsTSBCompare.com has been developed by Lloyds TSB Insurance Services Limited to offer our customers a choice of independent impartial quotes from a wide panel of insurance providers and energy suppliers. Comparison features include price, policy benefits, plan features and customer service rating, so consumers can make sure they get the policy that best meets their individual needs.

LloydsTSBCompare.com is a trading style of Lloyds TSB Insurance Services Limited registered in England and Wales under company number 968406, with registered offices at 25 Gresham Street, London EC2V 7HN.

LloydsTSBCompare.com is authorised and regulated by the Financial Services Authority (Registration number: 310738).

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Debt Advisers Direct remind consumers with debt problems of the importance of seeking debt advice early on, before their finances are further affected by the recession

Commenting on the nation’s economic troubles, Debt Advisers Direct stressed the importance of seeking debt advice in time, before debt problems can escalate out of control.

“Whatever the economic climate, it always makes sense to address debts at the first sign of trouble,” said a spokesperson for the company. “During times of economic uncertainty, it’s more important than ever.

“The problems in the housing market alone pose a significant threat to the livelihoods of people in all walks of life. What was initially seen as an issue for estate agents has grown to affect builders, movers, decorators, furniture stores and so on – after months of negative news from companies directly linked to the housing market, we’re now hearing of problems in a much wider range of industries.

“With so many either out of work or facing the possibility of unemployment, people are spending less and problems in the housing industry are spilling over into the high street, placing even more jobs at risk – at a time when new employment may be hard to find.

“Coping with a period of reduced income is never easy, but people with high levels of debt are far more likely to experience financial problems almost as soon as their income drops.

“This underlines the need to tackle debt problems sooner, rather than later. Many people with smaller debt problems may find a chat with a debt adviser could help them get on top of their finances without making any major lifestyle changes. Once the adviser understands their financial circumstances, they should be able to provide some budgeting advice and suggest practical ways of reducing their level of debt.

“When it comes to more serious financial problems, however, many people are put off by the sheer size of their debts. Someone who owes tens of thousands of pounds may not feel there’s anything they can do to make an appreciable ‘dent’ in their debts.”

In most cases this is unlikely to be true: “However much they owe, they may still have a range of options, depending on their circumstances. A debt consolidation mortgage, for example, could be right for someone who wants to reduce their monthly outgoings and simplify their finances, while an IVA (Individual Voluntary Arrangement) could help someone who literally can’t keep up with their debt repayments – and who can’t realistically expect to repay their debts in a reasonable timeframe.

“We were very pleased to see the emphasis which the Chancellor’s Pre-Budget Report placed on debt advice – the Government is dedicating more than £15 million of additional funding to ensure people can access debt advice when they need it. Similarly, we were pleased to see certain credit card providers and mortgage lenders extending a ‘grace period’ to people who fall behind on their repayments.

“Even so, we remind borrowers how important it is to talk to a debt adviser before things reach the stage where they’re missing payments of any kind: taking steps to tackle their debt today is virtually certain to improve their chances of getting through the recession with their finances in a good state.”

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Sunwest Trust Claims Their New Friends And Family Lending Program Will Be A Contributing Solution To The Credit Problem

In the wake of the National Credit Crisis, Sunwest Trust, Inc., a leading financial company, unveils its new “Friends and Family Lending Program”. The program seeks to interchange the roles of lending banks with financially solvent family members taking up such a role.

Outlining their new plan, the Company insists that solvent members in the family can assume the role of bankers. They could be lending to such members who are seeking loans for purposes such as having a new home. “The ability to fall back on solvent family members for financial support would be a welcome alternative for people who are finding that getting loans is difficult,” says Terry White, CEO, Sunwest Trust, Inc.

http://www.sunwesttrust.com/

The logic behind the argument advanced by Sunwest Trust is that such lending could result in mutual benefit for the lender as well as the debtor. The debtor would benefit from the lower interest rates and the convenience of getting financing. Lenders, on the other hand, will gain from higher interest rates than they could get in comparison for their deposits made in the bank. “Thus, it will be higher income for the lender while a lower loan burden for the debtor,” adds White.

Another aspect of their statements in favor of the new plan is that with such loans, the lender’s money is more secured in comparison to those lent out to strangers. At the same time, the debtor gets significant income tax benefits.

Sunwest Trust, Inc. assists clients through the process by administering the loan in such manner that everything is well organized. “We can collect for taxes and insurance payables on a monthly basis so that the payments are spread throughout the year”, denotes White.

“Payments will be made to Sunwest Trust who will allocate these payments dividing them to principal and interest. The money can be deposited directly into your checking, money market, or savings accounts”, White further adds.

The Company cautions its clients that every investment is coupled with the risk of loss; however, this is a preferable risk being helpful both for the lender and their family members.

Sunwest Trust is confident of the success of their new program and the “Friends and Family Lending Program” is now currently offered to interested parties nationwide. Learn more by watching our video at http://www.youtube.com/watch?v=tDXc6JtzPsI

About Sunwest Trust
One of the leading financial Companies in Albuquerque, Sunwest Trust Inc. is the only one dealing with both escrow and completely self directed IRA simultaneously. The New Mexico Financial Institutions Division granted it with Trust powers in the year 2003, but has been an escrow company for over 21 years. While Sunwest specializes in self directed IRA, they also deal with real estate contracts, and mortgages. The Company is presently servicing over $900 Million in assets for over 12,000 individuals.

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New Research From Barclays Financial Planning Shows A Worrying Trend Of People Not Providing Themselves And Their Families With A Suitable Financial Safety Net

Despite the level of fear surrounding unemployment and debts in the current environment, an online poll of 2001 British adults between 24th and 28th October 2008 conducted for Barclays Financial Planning by Opinium Research shows a worrying trend of people not providing themselves and their families with a safety net.

According to the research, over half the people questioned are worried about being able to maintain their outgoings over the next 12 months, pushing essential safety nets like income protection and critical illness cover to the bottom of their priorities. The results show, nearly half (47%) of UK adults have no protection policies in place whatsoever, to protect them and their families in the event of losing their income, health issues or even death.

The safety net gap:
52% have no life insurance
75% have no critical illness cover
78% have no income protection cover

Those aged between 35 and 54 often have the most responsibilities in terms of dependants and outgoings, but showed a large gap in their protection cover, with 45% having no life cover and 74% with no income protection insurance.

Alison Tattersall, Head of Customer and Proposition at Barclays Financial Planningsaid: “When finances are tight it is often responsibilities like protection policies that fall to a lower priority, and of course these policies protect outcomes that people don’t want to think about. But people must consider the financial consequences of what would happen if they were unable to work, or their dependents’ situation if they died, it would be far worse than any concerns they currently have over struggling to meet their outgoings.”

When looking at what other safety nets people could be relying on, the research reveals that 60% of people admit to having nothing saved, having less than one month’s salary in the bank, or not knowing what they have in savings at all. Worryingly the report also reveals that nearly 40% of people don’t receive benefits such as sick pay, death in service or health insurance, or simply do not know if they would be entitled to them. Coupled with 81% of people not knowing what they would receive in benefits from the state if they were too ill to work.

Alison Tattersall continued: “This is a worrying trend. People need to know what their state and employee benefits are before they are able to plan their protection needs properly.

“Over half of people that do have protection policies said they did not take advice or did not know if they had taken advice when buying their cover, and over 70% do not know or only have a rough idea what level of payout their policies would give them if a claim was made. This could clearly mean people end up without the right cover for their needs, which is often just as bad as having no protection at all. We urge people to seek professional advice and review the level of protection insurance they have to cover themselves or their family.”

About Barclays Financial Planning
Barclays Financial Planning (BFP) provides tailored financial advice on life, pensions and investment products across a carefully selected range of products from a range of product providers according to customer needs. It is one of the largest financial advisers in the UK, with over 700 advisers. A no obligation financial planning consultation is available to personal, business and corporate clients, and our advisers have a range of solutions available for businesses wishing to discuss succession planning.

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Think Money Have Advised Consumers To Avoid Getting Into Debt Wherever Possible This Christmas, With The Recession Threatening To Put Further Pressure On The Finances Of British Households In 2009

Financial solutions company Think Money have warned consumers to be careful over the amount of debt they incur over the festive season, in order to avoid potential debt problems in the midst of an economic recession.

They have also advised those consumers who do rely on credit to act early and tackle any debts before they have the chance to grow, and to be selective over the types of credit used in order to prevent the debts from becoming unmanageable.

For many families in the UK, including those who are usually comfortable financially, the Christmas season has become associated with debt. The tradition of spending large amounts of money on food and gifts has meant that large numbers of households fall into debt every year, even if it means spending a large part of the following year repaying those debts.

Indeed, a survey taken earlier this year by Savebuckets.com suggested that one in four Christmas borrowers were still repaying their Christmas debts in the following October – nine months after the money was originally spent.

A debt expert for financial solutions company Think Money commented: “In today’s society, many households actually expect to get into debt in order to get through the Christmas season – which can put them at risk of debt problems in the future. It’s much safer to focus more on how to avoid falling into debt – and with the right preparation and attitude, it is very much possible to do that.”

The spokesperson added that staying out of debt over the Christmas period does not necessarily have to mean cutting back on costs. “The households who are best prepared for the Christmas period are those who have thought about it long in advance and have been saving throughout the year. By saving just a relatively small amount each month, it’s quite possible to save enough to cover all the costs involved, without having to compromise.

“However, it seems that it is currently more common to pay with credit in the run-up to Christmas. This may have been fuelled by the relatively easy access to credit of the past few years, although due to the credit crunch, this may be a little more difficult this year.”

The spokesperson also said that the type of credit used can be crucial to consumers’ ability to repay the debt. “For those consumers who do rely on credit over the Christmas period, choosing the right form of credit is a simple step that can make all the difference.

“For example, it’s generally unadvisable to make large purchases on credit cards unless the buyer is absolutely sure they will be able to repay the debt in a short space of time. The APR on credit cards is typically very high, which means the debt can grow very quickly unless it is repaid promptly.

The Think Money spokesperson added that anyone finding themselves struggling with debt should seek debt advice straight away. “There are a number of debt solutions that can help to minimise outgoings and/or help to reduce debts, such as debt consolidation or an IVA (Individual Voluntary Arrangement). We urge anyone in serious debt to seek professional debt advice as soon as possible.”

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