Abacus Daily Debt News

Sainsbury’s Finance has moved to reduce the rates for customers who submit online applications for its range of personal loans.

Consumers who express an interest in borrowing between £7,000 and £25,000 from the lender can now expect to pay a typical annual percentage rate of 8.1 per cent.

And they will also receive a number of other benefits along with the new rate, including the fixed repayments for the duration of the loan and the ability to set their repayment over a maximum of seven years.

Head of loans at Sainsbury’s Finance Steven Baillie explained that the loans are ideal for those looking to increase their debt consolidation.

"Our loan products have been consistently in the best-buy tables and this cut makes them even more competitive," he remarked.

Price comparison website moneysupermarket.com recently urged consumers to take advantage of cheap loans and credit cards if they wish to reduce their outgoings during 2009.

By Tom Musk

Many UK adults are worried they may not be able to survive financially if they lose their jobs as a result of the financial downturn, new research has suggested.

According to a study by Callcredit, nearly one in five couples (17 per cent) would be unable to get by for beyond a month if one of them was to remain unemployed and over a quarter (26 per cent) have no savings to fall back on.

Women aged 25 to 34 are the most concerned about the impacts of the economic slump, with 41 per cent of females in this age range worrying that their partner may be made redundant this year.

Head of callcreditcheck.co.uk Owen Roberts urged consumers to seek help if they are struggling financially.

"Our advice to anyone who is struggling with debt repayments … is to speak with their lenders before things become unmanageable," he stated.

The research follows a similar study by Equifax, which found that 31 per cent of its customers would find themselves in financial difficulty within one month if they were to lose their job.

By Tom Musk

Many Britons are losing the opportunity to save money on their mobile phone contracts, new research has revealed.

A survey by moneysupermarket.com has found that over half of mobile customers do not anaylse their tariff when choosing a new contract, meaning many are paying more than is necessary.

According to the price comparison website, 55 per cent of adults with a mobile phone favour the latest handset or free gifts over a tariff that suits their needs, while 20 per cent have not renegotiated their deal for at least 12 months.

Manager of mobiles at moneysupermarket.com James Parker explained that the current economic downturn means it is "more important than ever" to be cost-effective.

"If people don’t look to get the most for their money … they could end up paying way over the odds for their mobile deal," he added.

Britons struggling with debt problems were recently urged by Fairinvestment.co.uk to use the new year to tackle their financial issues and increase their efforts to get debt free.

By Tom Musk

Halifax is to reduce its mortgage rates following yesterday’s announcement by the Bank of England that it is cutting the base rate by 0.5 per cent.

The lender has announced that customers with an existing tracker mortgage will benefit from the full 50 basis point reduction when the changes are implemented on February 1st.

However, those with standard variable rate (SVR) homeowner loans will only see a partial cut, from 4.75 per cent to 4.50 per cent.

Abbey is also set to give its tracker mortgage customers the benefit of reduced rates however, it has yet to confirm whether those with SVR packages or new customers looking to take out a tracker loan will see the benefits.

The Bank of England’s monetary policy committee reduced the base rate from two per cent to 1.5 per cent, meaning the figure is now at its lowest since the Bank was formed in 1694.

By Tom Musk

Almost half of over-50s are worried about the cost of heating their home during the current freezing temperatures, research from the Post Office has suggested.

A Survey by the firm found that 48 per cent are concerned about the financial implications of heating their property, with Met Office figures indicating average temperatures are currently below seven degrees.

Head of protection at the Post Office Duncan Caesar-Gordon explained that gas and electricity bills have become an "additional worry" for many in this age group.

"For the over-50s winter can be a really tough time and keeping warm is hard," he remarked, adding that those who take out the company’s over-50 life insurance policy will receive £30 towards their gas and electricity costs - an amount which may help those who are having difficulty heating their home due to problems with debt.

Another demographic that is worried about their finances is those without a partner, as research by Zurich has found that 35 per cent of singles are concerned about the additional cost associated with their marital status.

By Tom Musk

The base rate of interest is likely to be cut when the Bank of England’s monetary policy committee (MPC) makes an announcement on the issue tomorrow, according to the results of a new poll.

Of the 13 economists, financial institutions and business organisations questioned on the matter by Adfero, all expect the MPC to implement a cut.

Predictions for the reduction ranged from 50 to 100 percentage points, with chief economist at Lloyds TSB forecasting a one per cent cut, despite admitting that most are expecting a more modest reduction of 0.5 per cent.

"I think if they want to remain ahead of where markets are looking for and maybe get to where they want to be quicker … they’ll do [a] one percentage point cut," he remarked.

Such a reduction may benefit consumers struggling with their finances, as the prices of mortgages and loans from banks that pass the cut on may fall as a result.

The MPC’s December announcement on interest rates brought a one per cent cut, meaning the figure currently stands at two per cent.

By Tom Musk

Britons struggling financially have been urged to make their debt management a top priority for 2009.

Money education charity Credit Action has revealed that total UK personal debt was £1,456 billion at the end of November last year, a figure which Fairinvestment.co.uk has stated could be reduced through the use of effective debt advice.

Chartered financial planner at the firm Sharon Bratley explained that people should increase their efforts to become debt free at the beginning of the new year.

"January is a great time for people to get on top of their finances following the cost of Christmas," she explained, adding that debt "should not be ignored" and borrowers should seek advice from experts regarding debt consolidation or the possibility of entering an Individual Voluntary Arrangement.

Moneysupermarket.com recently urged consumers hoping to reduce their spending in 2009 to consider using more competitive financial products.

The price comparison website noted that customers could save up to £2,500 by switching loans, mortgages and credit cards.

By Tom Musk

The availability of credit may not improve in 2009, it has been suggested.

According to Charles Davis, economist at centre for economics and business research, unemployment will continue to rise this year and economic growth will be stagnant, with no guarantee of an improvement in lending levels from banks.

"I would remain cautious on the outlook for lending in 2009 … towards the end of next year we [will] maybe start to see some improvement in the City," he suggested.

Mr Davis stated it remains to be seen as yet whether the recapitalisation of banks has been successful, although he noted that interbank lending rates have dropped.

Louise Cuming, head of mortgages at moneysupermarket, recently said that lenders will focus on supporting borrowers suffering from debt management problems in 2009.

She added that there will be "no miraculous u-turn" in the low borrowing levels experienced last year.

Customers who have standard variable rate (SVR) mortgages from first direct paid the least interest during 2008, new figures have revealed.

According to data collected by Defaqto, borrowers who took out a £100,000 interest-only mortgage with the lender paid £5,918.16 over the last 12 months - £1,468.42 less than the most expensive deal, which came from Northern Rock.

Direct Line and HSBC also provided good deals for their customers, offering SVR mortgages which charged £6,180.14 and £6,322.27 in interest respectively.

Principal consultant of banking at Defaqto David Black explained that SVR mortgages have taken on "a much greater significance than in previous years" as a result of the economic downturn.

Customers who are looking to improve their debt management by switching their mortgage may wish to look into SVR offerings from first direct following publication of the data.

Leeds Building Society - which charges SVR customers £7,085.34 in interest - recently launched a range of new mortgage options for customers.

By Tom Musk