Abacus Daily Debt News

The amount of borrowers taking out a second mortgage has been impacted by the onset of the credit crunch, it has been stated.

Figures from the Finance and Leasing Association have revealed that new business in this sector was down 84 per cent in January, compared to a year previously.

In addition, the organisation reported that the amount of direct unsecured personal loans provided to consumers by its members dropped by 28 per cent during this period, while credit card lending fell by 12 per cent.

Spokesperson Fiona Hoyle described the decline as "marked", adding that the provision of second mortgages has been reduced "significantly".

The body noted that these loans are typically used by people to fund home improvements and that the drop in finance has come at a time when many owners are looking to renovate their properties.

Meanwhile, Norwich Union has warned homeowners that they may face "huge costs" in the future if they fail to insure their houses adequately.

By Jamie Price

The amount of borrowers taking out a second mortgage has been impacted by the onset of the credit crunch, it has been stated.

Figures from the Finance and Leasing Association have revealed that new business in this sector was down 84 per cent in January, compared to a year previously.

In addition, the organisation reported that the amount of direct unsecured personal loans provided to consumers by its members dropped by 28 per cent during this period, while credit card lending fell by 12 per cent.

Spokesperson Fiona Hoyle described the decline as "marked", adding that the provision of second mortgages has been reduced "significantly".

The body noted that these loans are typically used by people to fund home improvements and that the drop in finance has come at a time when many owners are looking to renovate their properties.

Meanwhile, Norwich Union has warned homeowners that they may face "huge costs" in the future if they fail to insure their houses adequately.

By Jamie Price

The amount of times it takes for cheque and electronic bank payments to be processed has become faster, it has been stated.

However, there is still room for improvement in this area, the Office of Fair Trading (OFT) has noted.

It comes after the OFT published a review of the Payments Council, outlining how the body is performing in ensuring transactions are working well for businesses and consumers.

The research found that processes have been sped up, with some customers being able to make payments within hours rather than days.

But the OFT reported that enhancements can still be made, as the Faster Payments Service is only operating at a capacity of 69 per cent across its member banks.

"More work is needed to sharpen the Council’s focus on the flexibility and efficiency of its systems and to make sure benefits are passed on to the end user," commented OFT spokesperson Cavendish Elithorn.

The Payments Council welcomed the review, saying that it will work to implement improvements.

By Jamie Price

The rate of inflation rose by 3.2 per cent last month, the Office for National Statistics has revealed.

This was up on January’s figure of three per cent for consumer prices index (CPI) inflation, defying many economists’ warnings that deflation may occur.

Only one downward contribution to the CPI rate came from gas and electricity costs, which remained unchanged during the month, but were lower than last year’s levels when energy providers introduced price hikes.

Despite this, Age Concern and Help the Aged have warned that the elderly still struggle to afford fuel bills and are suffering from high inflation.

"They’re not benefiting from falls in mortgage interest and are spending a large chunk of their income on food and fuel, for which prices remain high," explained Age Concern director general Gordon Lishman.

He added that the income from savings that many older people rely on has been "blown away" by interest rate cuts.

By Jamie Price

Ofgem, the regulator of the energy market, has unveiled a series of new rules for providers that are aimed at protecting vulnerable households.

The body has revealed that it will work to tackle "unjustified" price discrepancies in the market that can see some customers facing unfair charges.

Greater transparency and fair dealing are among the issues that the regulator plans to discuss with energy firms, while it hopes to stamp out the poor deals that are offered to some consumers by the industry.

Energy and climate change secretary Ed Miliband welcomed the move, stating that "tough" action is needed to combat unfair pricing policies.

"It is right that Ofgem is acting to ensure that wherever you live and whatever payment method you use, you will not be unfairly discriminated against," he commented.

Mr Miliband described some instances of excessive charges imposed on vulnerable customers by energy companies as "inexcusable".

By Jamie Price

People embarking on an Easter holiday may incur extra costs by using their debit cards overseas, it has been noted.

Although such products are free to use in the UK, customers may be charged for withdrawals and purchases in foreign countries, something that could lead to a "nasty shock" when they get home, according to Moneynet.co.uk.

The site stated that coupled with the "hammering" that the pound has taken against the euro, this could make taking a holiday very expensive.

It advised consumers to be aware of the debit card charges before they set off on their breaks, something that could help them with their budgets.

Meanwhile, new rules being imposed on credit card companies banning them from raising limits without the customer’s consent may assist people in avoiding debt, the Money Advice Trust has stated.

"It might help change people’s attitudes towards credit," commented spokesperson Beccy Boden Wilks.

Those in need of debt help due to large credit card bills have been urged to consider applying for a new credit card that offers zero per cent interest on balance transfers.

David Kuo, head of personal finance at money website fool.co.uk, stated that it is hard to find cards that offer such a deal in the current climate, but those people who are able to access one have been advised to make the most of the opportunity.

Mr Kuo said that debt-burdened consumers should "transfer whatever balances they have to a zero per cent card and take advantage of the interest-free period to sort out their finances".

Then these consumers should throw away their old card and use their interest-free period to implement a debt management plan and sort out their financial affairs, he remarked.

Research published by Abbey last week revealed that Britons are needlessly paying £9 billion in credit card interest every year.

By Rosie Park

The average energy bill in January 2009 was 36 per cent higher compared to the same month a year earlier, research from uSwitch.com has revealed.

According to the comparison website, despite the price of utility bills increasing by 42 per cent last year, recent reductions by energy providers will only lower bills by an average of £56 in 2009.

The website urged consumers to make their bills more manageable by switching provider or moving to an online energy deal, advice which may be useful to those drawing up a debt management plan.

Director of consumer policy at uSwitch.com Ann Robinson warned that energy prices could rise again towards the end of the year.

"To cash strapped consumers this 4.3 per cent or £56 dip in energy prices will seem like a drop in the ocean, especially when compared with last year’s 42 per cent or £381 price hike," she remarked.

These findings follow a poll by Consumer Focus that revealed 44 per cent of Britons have cut down on essentials in order to afford their winter utility bills.

By Rosie Park

Credit card holders are unaware how much interest will be charged on their debts, an expert has said.

Head of personal finance at money website Fool.co.uk David Kuo explained that many people "don’t understand debt" or how "penal interest rates" can affect their finances.

Furthermore, debt advice was offered to consumers by Mr Kuo as he called for credit card holders to be more disciplined with their spending due to limit cuts by lenders.

He added that consumers should look to pay off more than the minimum monthly amount on their credit cards.

"If people pay off these credit card debts at the minimum rate it would take them many years to be clear of debt," Mr Kuo said.

This debt advice follows figures published by Abbey last week.

The bank revealed that 69 per cent of Britons have a credit card, with the average balance standing at £3,256.

By Rosie Park

Consumers who give their finances a spring clean could save nearly £2,000 a year, it has been suggested.

Halifax has offered a number tips to help Britons save an average of £1,799 a year, a move which it suggests could be used to save for a deposit on a house.

People who quit smoking could have an extra £1,930 in their bank account in 12 months, while cutting out a morning latte would save £37.80 a month or £453.60 over the course of a year, Halifax stated.

Head of mortgage development at the bank Jaedon Green said: "By identifying a few simple changes to their everyday routine and saving regularly, first-time buyers can make a big boost to their deposit pot."

Such advice may also help those in need of a debt management plan.

Last month, energy expert Robert Hammond from Consumer Focus gave tips on how to save money on gas and electricity.

He urged householders to check their bills regularly as well as turning off appliances that aren’t in use.

By Rosie Park